SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________________________________

FORM 10-Q

_____________________________________________

(Mark One)


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, ~~2020~~2021


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

____________________________________________

Marsh & McLennan Companies, Inc.

1166 Avenue of the Americas

New York, New York 10036

(212) 345-5000

_____________________________________________

Commission file number 1-5998

State of Incorporation: Delaware

I.R.S. Employer Identification No. 36-2668272

_____________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of exchange on which registered

Common Stock, par value $1.00 per share

MMC

New York Stock Exchange

Chicago Stock Exchange

London Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-Accelerated Filer

☐(Do not check if a smaller reporting company)

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

As of October ~~23, 2020,~~15, 2021, there were outstanding ~~507,190,569~~504,895,367 shares of common stock, par value $1.00 per share, of the registrant.

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains "forward-looking statements," as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management's current views concerning future events or results, use words like "anticipate," "assume," "believe," "continue," "estimate," "expect," "intend," "plan," "project" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will" and "would."

Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed or implied in our forward-looking statements. Factors that could materially affect our future results include, among other things:

•the ~~financial~~increasing prevalence of ransomware, supply chain and ~~operational impact~~other forms of ~~COVID-19 on~~cyber attacks, and their potential to disrupt our ~~revenue~~operations and ~~ability to generate new business, our overall level of profitability and cash flow, and our liquidity, including the timeliness and collectability of our receivables;~~

•~~the impact of disruption~~result in the ~~credit~~disclosure of confidential client or financial markets, or changes to our credit ratings, including as a result of COVID-19, on our ability to access capital or repay our significant outstanding indebtedness on favorable terms and our compliance with the covenants contained in the agreements that govern our indebtedness;company information;

•the impact from lawsuits ~~other contingent liabilities and loss contingencies~~or investigations arising from errors and omissions, ~~breach~~breaches of fiduciary duty or other claims against us ~~including claims related to pandemic coverage;~~in our capacity as a broker or investment advisor;

•~~the impact of investigations, reviews, or other~~increased regulatory activity and scrutiny by regulatory or law enforcement ~~authorities, including the ongoing U.K. FCA review of legacy JLT enhanced transfer value advice;~~authorities;

•the financial and operational impact of complying with laws and regulations where we operate and the risks of noncompliance with such laws by us or third-party providers, including anti-corruption laws such as the U.S. Foreign Corrupt Practices Act, U.K. Anti-Bribery Act ~~trade sanctions regimes~~ and cybersecurity and data privacy regulations such as the E.U.’s General Data Protection Regulation;

•~~our ability to manage risks associated with our investment management and related services business, particularly in~~ the ~~context~~impact of ~~volatile equity markets caused by~~ COVID-19, including emerging vaccine mandates, on our ~~ability to execute timely trades in light~~business operations, results of ~~increased trading volume~~operations, cash flows and ~~to manage potential conflicts of interest between investment consulting and fiduciary management services;~~financial position;

•our ability to compete effectively and adapt to changes in the competitive environment, including to respond to technological change, disintermediation, digital disruption and other types of innovation;

•our ability to manage risks associated with our investment management and related services business, particularly in the context of uncertain equity markets, including our ability to execute timely trades in light of increased trading volume and to manage potential conflicts of interest;

•our ability to attract and retain industry leading talent;

•~~our ability to maintain adequate safeguards to protect~~ the ~~security~~impact of ~~our information systems~~changes in tax laws, guidance and ~~confidential, personal~~interpretations, or ~~proprietary information, including those in the existing JLT information systems, particularly given the increased risk of phishing~~disagreements with tax authorities; and ~~other cybersecurity attacks or unauthorized dissemination of information caused by remote work arrangements;~~

•the regulatory, contractual and reputational risks that arise based on insurance placement activities and ~~various~~ insurer revenue ~~streams;~~streams.

•~~our ability to successfully recover if we experience a business continuity problem due to cyberattack, natural disaster or otherwise; and~~

•~~the impact of changes in tax laws, guidance and interpretations or disagreements with tax authorities.~~

The factors ~~identified~~identified above are not exhaustive. Marsh & McLennan Companies, Inc. and its subsidiaries (the "Company" or "Marsh McLennan") operate in a dynamic business environment in which new risks emerge frequently. Accordingly, we caution readers not to place undue reliance on any forward-looking statements, which are based only on information currently available to us and speak only as of the dates on which they are made. The Company undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date on which it is made.

Further information concerning Marsh & McLennan ~~Companies~~ and its businesses, including information about factors that could materially affect our results of operations and financial condition, is contained in the Company's filings with the Securities and Exchange Commission, including the "Risk Factors" section and the "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section of this Quarterly Report on Form 10-Q and our most recently filed Annual Report on Form 10-K.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(In millions, except per share amounts)		2020		2019		2020		2019
(In millions, except per share data)										(In millions, except per share data)	2021		2020		2021		2020
Revenue	Revenue	$	3,968	$	3,968	$	12,808	$	12,388	Revenue	$	4,583	$	3,968	$	14,683	$	12,808
Expense:	Expense:									Expense:
Compensation and benefits	Compensation and benefits	2,495		2,437		7,479		7,256		Compensation and benefits	2,853		2,495		8,520		7,479
Other operating expenses	Other operating expenses	933		1,064		2,834		3,047		Other operating expenses	990		933		2,837		2,834
Operating expenses	Operating expenses	3,428		3,501		10,313		10,303		Operating expenses	3,843		3,428		11,357		10,313
Operating income	Operating income	540		467		2,495		2,085		Operating income	740		540		3,326		2,495
Other net benefit credits	Other net benefit credits	60		69		187		203		Other net benefit credits	69		60		211		187
Interest income	Interest income	1		4		5		34		Interest income	1		1		2		5
Interest expense	Interest expense	(128)		(133)		(387)		(394)		Interest expense	(107)		(128)		(335)		(387)
Cost of extinguishment of debt		0		0		0		(32)
Investment (loss) income		(14)		7		(47)		20
Acquisition related derivative contracts		0		0		0		(8)

Investment income (loss)										Investment income (loss)	13		(14)		43		(47)

Income before income taxes	Income before income taxes	459		414		2,253		1,908		Income before income taxes	716		459		3,247		2,253
Income tax expense	Income tax expense	139		108		586		531		Income tax expense	174		139		880		586

Net income before non-controlling interests	Net income before non-controlling interests	320		306		1,667		1,377		Net income before non-controlling interests	542		320		2,367		1,667
Less: Net income attributable to non-controlling interests	Less: Net income attributable to non-controlling interests	4		3		25		26		Less: Net income attributable to non-controlling interests	5		4		27		25
Net income attributable to the Company	Net income attributable to the Company	$	316	$	303	$	1,642	$	1,351	Net income attributable to the Company	$	537	$	316	$	2,340	$	1,642
Net income per share attributable to the Company:	Net income per share attributable to the Company:									Net income per share attributable to the Company:
Basic	Basic	$	0.62	$	0.60	$	3.25	$	2.67	Basic	$	1.06	$	0.62	$	4.61	$	3.25

Diluted	Diluted	$	0.62	$	0.59	$	3.21	$	2.64	Diluted	$	1.05	$	0.62	$	4.56	$	3.21

Average number of shares outstanding:	Average number of shares outstanding:									Average number of shares outstanding:
Basic	Basic	507		506		506		506		Basic	506		507		508		506
Diluted	Diluted	512		511		511		511		Diluted	513		512		513		511
Shares Outstanding at September 30,		507		505		507		505
Shares outstanding at September 30,										Shares outstanding at September 30,	505		507		505		507

The accompanying notes are an integral part of these unaudited consolidated statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2020 2019 2020 2019
Net income before non-controlling interests $ 320 $ 306 $ 1,667 $ 1,377
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments 500 (475) (200) (366)
(Loss) gain related to pension/post-retirement plans (73) 82 136 102
Other comprehensive income (loss), before tax 427 (393) (64) (264)
Income tax (benefit) expense on other comprehensive income (7) 11 29 20
Other comprehensive income (loss), net of tax 434 (404) (93) (284)
Comprehensive income (loss) 754 (98) 1,574 1,093
Less: comprehensive income attributable to non-controlling interest 4 3 25 26
Comprehensive income (loss) attributable to the Company $ 750 $ (101) $ 1,549 $ 1,067


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Net income before non-controlling interests	$	542	$	320	$	2,367	$	1,667
Other comprehensive (loss) income, before tax:
Foreign currency translation (loss) gain adjustments	(346)		500		(413)		(200)

Gain (loss) related to pension/post-retirement plans	204		(73)		234		136
Other comprehensive (loss) income, before tax	(142)		427		(179)		(64)
Income tax expense (benefit) on other comprehensive income	50		(7)		56		29
Other comprehensive (loss) income, net of tax	(192)		434		(235)		(93)
Comprehensive income	350		754		2,132		1,574
Less: comprehensive income attributable to non-controlling interest	5		4		27		25
Comprehensive income attributable to the Company	$	345	$	750	$	2,105	$	1,549

The accompanying notes are an integral part of these unaudited consolidated statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


(In millions, except share amounts)		(Unaudited) September 30, 2020		December 31, 2019
(In millions, except share data)						(In millions, except share data)	(Unaudited) September 30, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	2,388	$	1,155	Cash and cash equivalents	$	1,398	$	2,089
Receivables	Receivables					Receivables
Commissions and fees	Commissions and fees	4,658		4,608		Commissions and fees	5,190		4,679
Advanced premiums and claims	Advanced premiums and claims	121		123		Advanced premiums and claims	120		112

Other	Other	604		645		Other	475		677
		5,383		5,376			5,785		5,468
Less-allowance for credit losses	Less-allowance for credit losses	(147)		(140)		Less-allowance for credit losses	(161)		(142)
Net receivables	Net receivables	5,236		5,236		Net receivables	5,624		5,326

Other current assets	Other current assets	688		677		Other current assets	855		740
Total current assets	Total current assets	8,312		7,068		Total current assets	7,877		8,155
Goodwill	Goodwill	15,034		14,671		Goodwill	15,648		15,517
Other intangible assets	Other intangible assets	2,711		2,774		Other intangible assets	2,587		2,699
Fixed assets (net of accumulated depreciation and amortization of $2,113 at September 30, 2020 and $2,001 at December 31, 2019)		864		858
Fixed assets (net of accumulated depreciation and amortization of $2,327 at September 30, 2021 and $2,159 at December 31, 2020)						Fixed assets (net of accumulated depreciation and amortization of $2,327 at September 30, 2021 and $2,159 at December 31, 2020)	824		856
Pension related assets	Pension related assets	1,825		1,632		Pension related assets	1,935		1,768
Right of use assets	Right of use assets	1,884		1,921		Right of use assets	1,899		1,894
Deferred tax assets	Deferred tax assets	623		676		Deferred tax assets	692		702
Other assets	Other assets	1,428		1,757		Other assets	1,520		1,458
		$	32,681	$	31,357		$	32,982	$	33,049

The accompanying notes are an integral part of these unaudited consolidated statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Continued)


(In millions, except share amounts)		(Unaudited) September 30, 2020		December 31, 2019
(In millions, except share data)						(In millions, except share data)	(Unaudited) September 30, 2021		December 31, 2020
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Short-term debt	Short-term debt	$	1,216	$	1,215	Short-term debt	$	516	$	517
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	2,662		2,746		Accounts payable and accrued liabilities	2,833		3,050
Accrued compensation and employee benefits	Accrued compensation and employee benefits	1,762		2,197		Accrued compensation and employee benefits	2,365		2,400

Current lease liabilities	Current lease liabilities	335		342		Current lease liabilities	339		342
Accrued income taxes	Accrued income taxes	318		179		Accrued income taxes	333		247
Dividends payable	Dividends payable	237		0		Dividends payable	273		—
Total current liabilities	Total current liabilities	6,530		6,679		Total current liabilities	6,659		6,556
Fiduciary liabilities	Fiduciary liabilities	8,765		7,344		Fiduciary liabilities	10,408		8,585
Less – cash and investments held in a fiduciary capacity	Less – cash and investments held in a fiduciary capacity	(8,765)		(7,344)		Less – cash and investments held in a fiduciary capacity	(10,408)		(8,585)
		0		0			—		—
Long-term debt	Long-term debt	11,532		10,741		Long-term debt	10,228		10,796
Pension, post-retirement and post-employment benefits	Pension, post-retirement and post-employment benefits	2,163		2,336		Pension, post-retirement and post-employment benefits	2,387		2,662
Long-term lease liabilities	Long-term lease liabilities	1,902		1,926		Long-term lease liabilities	1,900		1,924
Liabilities for errors and omissions	Liabilities for errors and omissions	352		335		Liabilities for errors and omissions	356		366
Other liabilities	Other liabilities	1,450		1,397		Other liabilities	1,564		1,485
Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies	—		—
Equity:	Equity:					Equity:
Preferred stock, $1 par value, authorized 6,000,000 shares, NaN issued		0		0
Common stock, $1 par value, authorized 1,600,000,000 shares, issued 560,641,640 shares at September 30, 2020 and December 31, 2019		561		561
Preferred stock, $1 par value, authorized 6,000,000 shares, none issued						Preferred stock, $1 par value, authorized 6,000,000 shares, none issued	—		—
Common stock, $1 par value, authorized 1,600,000,000 shares, issued 560,641,640 shares at September 30, 2021 and December 31, 2020						Common stock, $1 par value, authorized 1,600,000,000 shares, issued 560,641,640 shares at September 30, 2021 and December 31, 2020	561		561
Additional paid-in capital	Additional paid-in capital	882		862		Additional paid-in capital	1,034		943
Retained earnings	Retained earnings	15,902		15,199		Retained earnings	17,589		16,272
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(5,148)		(5,055)		Accumulated other comprehensive loss	(5,345)		(5,110)
Non-controlling interests	Non-controlling interests	161		150		Non-controlling interests	154		156
		12,358		11,717			13,993		12,822
Less – treasury shares, at cost, 53,626,539 shares at September 30, 2020 and 57,013,097 shares at December 31, 2019		(3,606)		(3,774)
Less – treasury shares, at cost, 55,175,963 shares at September 30, 2021 and 52,914,550 shares at December 31, 2020						Less – treasury shares, at cost, 55,175,963 shares at September 30, 2021 and 52,914,550 shares at December 31, 2020	(4,105)		(3,562)
Total equity	Total equity	8,752		7,943		Total equity	9,888		9,260
		$	32,681	$	31,357		$	32,982	$	33,049

The accompanying notes are an integral part of these unaudited consolidated statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


For the Nine Months Ended September 30,	For the Nine Months Ended September 30,					For the Nine Months Ended September 30,
(In millions)	(In millions)	2020		2019		(In millions)	2021		2020
Operating cash flows:	Operating cash flows:					Operating cash flows:
Net income before non-controlling interests	Net income before non-controlling interests	$	1,667	$	1,377	Net income before non-controlling interests	$	2,367	$	1,667
Adjustments to reconcile net income to cash provided by operations:
Adjustments to reconcile net income used for operations:						Adjustments to reconcile net income used for operations:
Depreciation and amortization of fixed assets and capitalized software	Depreciation and amortization of fixed assets and capitalized software	282		245		Depreciation and amortization of fixed assets and capitalized software	291		282
Amortization of intangible assets	Amortization of intangible assets	265		235		Amortization of intangible assets	278		265

Non cash lease expense	Non cash lease expense	241		236		Non cash lease expense	241		241
Adjustments and payments related to contingent consideration liability		(14)		(9)
Adjustments and payments related to contingent consideration assets and liabilities						Adjustments and payments related to contingent consideration assets and liabilities	(16)		(14)

Charge for early extinguishment of debt		0		32

Provision for deferred income taxes	Provision for deferred income taxes	6		95		Provision for deferred income taxes	7		6
Loss (gain) on investments		47		(20)
Net loss on disposition of assets		9		36
Net (gain) loss on investments						Net (gain) loss on investments	(43)		47
Net (gain) loss on disposition of assets						Net (gain) loss on disposition of assets	(37)		9
Share-based compensation expense	Share-based compensation expense	219		184		Share-based compensation expense	263		219
Change in fair value of acquisition-related derivative contracts		0		8

Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Net receivables	Net receivables	77		(84)		Net receivables	(336)		77
Other current assets	Other current assets	(14)		30		Other current assets	(114)		(14)
Other assets	Other assets	69		(59)		Other assets	(115)		69
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	(144)		(126)		Accounts payable and accrued liabilities	(66)		(144)
Accrued compensation and employee benefits	Accrued compensation and employee benefits	(431)		(281)		Accrued compensation and employee benefits	(53)		(431)
Accrued income taxes	Accrued income taxes	150		120		Accrued income taxes	92		150
Contributions to pension and other benefit plans in excess of current year credit	Contributions to pension and other benefit plans in excess of current year credit	(240)		(269)		Contributions to pension and other benefit plans in excess of current year credit	(282)		(240)
Other liabilities	Other liabilities	74		(149)		Other liabilities	(96)		74
Operating lease liabilities	Operating lease liabilities	(254)		(240)		Operating lease liabilities	(262)		(254)
Effect of exchange rate changes	Effect of exchange rate changes	(10)		(70)		Effect of exchange rate changes	(45)		(10)
Net cash provided by operations	Net cash provided by operations	1,999		1,291		Net cash provided by operations	2,074		1,999
Financing cash flows:	Financing cash flows:					Financing cash flows:
Purchase of treasury shares	Purchase of treasury shares	0		(300)		Purchase of treasury shares	(734)		—
Net increase in commercial paper		0		325
Net borrowings from term-loan and credit facilities		1,000		300

Borrowings from term-loan and credit facilities						Borrowings from term-loan and credit facilities	—		1,000
Proceeds from issuance of debt	Proceeds from issuance of debt	737		6,459		Proceeds from issuance of debt	—		737
Repayments of debt	Repayments of debt	(1,011)		(760)		Repayments of debt	(512)		(1,011)

Payments for early extinguishment of debt		0		(585)

Purchase of non-controlling interests	Purchase of non-controlling interests	(3)		(75)		Purchase of non-controlling interests	—		(3)
Acquisition-related derivative payments		0		(337)

Shares withheld for taxes on vested units – treasury shares	Shares withheld for taxes on vested units – treasury shares	(131)		(89)		Shares withheld for taxes on vested units – treasury shares	(99)		(131)
Issuance of common stock from treasury shares	Issuance of common stock from treasury shares	98		132		Issuance of common stock from treasury shares	115		98
Payments of deferred and contingent consideration for acquisitions	Payments of deferred and contingent consideration for acquisitions	(125)		(60)		Payments of deferred and contingent consideration for acquisitions	(110)		(125)
Receipts of contingent consideration for dispositions						Receipts of contingent consideration for dispositions	71		—
Distributions of non-controlling interests	Distributions of non-controlling interests	(26)		(18)		Distributions of non-controlling interests	(27)		(26)
Dividends paid	Dividends paid	(702)		(655)		Dividends paid	(750)		(702)
Net cash (used for) provided by financing activities		(163)		4,337
Net cash used for financing activities						Net cash used for financing activities	(2,046)		(163)
Investing cash flows:	Investing cash flows:					Investing cash flows:
Capital expenditures	Capital expenditures	(278)		(284)		Capital expenditures	(268)		(278)
Net sales of long-term investments		102		193
Net sale of long term investments						Net sale of long term investments	2		102

Purchase of equity investment		0		(91)
Proceeds from sales of fixed assets		3		4

Dispositions	Dispositions	93		225		Dispositions	84		93
Acquisitions	Acquisitions	(559)		(5,500)		Acquisitions	(401)		(559)

Other, net	Other, net	(7)		(51)		Other, net	(6)		(4)
Net cash used for investing activities	Net cash used for investing activities	(646)		(5,504)		Net cash used for investing activities	(589)		(646)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	43		23		Effect of exchange rate changes on cash and cash equivalents	(130)		43
Increase in cash and cash equivalents		1,233		147
(Decrease) increase in cash and cash equivalents						(Decrease) increase in cash and cash equivalents	(691)		1,233
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	1,155		1,066		Cash and cash equivalents at beginning of period	2,089		1,155

Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	2,388	$	1,213	Cash and cash equivalents at end of period	$	1,398	$	2,388

The accompanying notes are an integral part of these unaudited consolidated statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(In millions, except per share amounts)		2020		2019		2020		2019
(In millions, except per share data)										(In millions, except per share data)	2021		2020		2021		2020
COMMON STOCK	COMMON STOCK									COMMON STOCK
Balance, beginning and end of period	Balance, beginning and end of period	$	561	$	561	$	561	$	561	Balance, beginning and end of period	$	561	$	561	$	561	$	561
ADDITIONAL PAID-IN CAPITAL	ADDITIONAL PAID-IN CAPITAL									ADDITIONAL PAID-IN CAPITAL
Balance, beginning of period	Balance, beginning of period	$	814	$	736	$	862	$	817	Balance, beginning of period	$	945	$	814	$	943	$	862
Change in accrued stock compensation costs	Change in accrued stock compensation costs	69		65		6		23		Change in accrued stock compensation costs	89		69		41		6
Issuance of shares under stock compensation plans and employee stock purchase plans	Issuance of shares under stock compensation plans and employee stock purchase plans	(1)		(5)		15		(44)		Issuance of shares under stock compensation plans and employee stock purchase plans	—		(1)		50		15
Other	Other	0		0		(1)		0		Other	—		—		—		(1)
Balance, end of period	Balance, end of period	$	882	$	796	$	882	$	796	Balance, end of period	$	1,034	$	882	$	1,034	$	882
RETAINED EARNINGS	RETAINED EARNINGS									RETAINED EARNINGS
Balance, beginning of period	Balance, beginning of period	$	16,060	$	14,741	$	15,199	$	14,347	Balance, beginning of period	$	17,597	$	16,060	$	16,272	$	15,199

Net income attributable to the Company	Net income attributable to the Company	316		303		1,642		1,351		Net income attributable to the Company	537		316		2,340		1,642
Dividend equivalents declared	Dividend equivalents declared	(3)		(2)		(9)		(6)		Dividend equivalents declared	(2)		(3)		(8)		(9)
Dividends declared	Dividends declared	(471)		(231)		(930)		(881)		Dividends declared	(543)		(471)		(1,015)		(930)
Balance, end of period	Balance, end of period	$	15,902	$	14,811	$	15,902	$	14,811	Balance, end of period	$	17,589	$	15,902	$	17,589	$	15,902
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME	ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME									ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
Balance, beginning of period	Balance, beginning of period	$	(5,582)	$	(4,527)	$	(5,055)	$	(4,647)	Balance, beginning of period	$	(5,153)	$	(5,582)	$	(5,110)	$	(5,055)

Other comprehensive income (loss), net of tax		434		(404)		(93)		(284)
Other comprehensive (loss) income, net of tax										Other comprehensive (loss) income, net of tax	(192)		434		(235)		(93)
Balance, end of period	Balance, end of period	$	(5,148)	$	(4,931)	$	(5,148)	$	(4,931)	Balance, end of period	$	(5,345)	$	(5,148)	$	(5,345)	$	(5,148)
TREASURY SHARES	TREASURY SHARES									TREASURY SHARES
Balance, beginning of period	Balance, beginning of period	$	(3,627)	$	(3,446)	$	(3,774)	$	(3,567)	Balance, beginning of period	$	(3,842)	$	(3,627)	$	(3,562)	$	(3,774)
Issuance of shares under stock compensation plans and employee stock purchase plans	Issuance of shares under stock compensation plans and employee stock purchase plans	21		29		168		250		Issuance of shares under stock compensation plans and employee stock purchase plans	37		21		191		168

Purchase of treasury shares	Purchase of treasury shares	0		(200)		0		(300)		Purchase of treasury shares	(300)		—		(734)		—
Balance, end of period	Balance, end of period	$	(3,606)	$	(3,617)	$	(3,606)	$	(3,617)	Balance, end of period	$	(4,105)	$	(3,606)	$	(4,105)	$	(3,606)
NON-CONTROLLING INTERESTS	NON-CONTROLLING INTERESTS									NON-CONTROLLING INTERESTS
Balance, beginning of period	Balance, beginning of period	$	166	$	272	$	150	$	73	Balance, beginning of period	$	156	$	166	$	156	$	150
Net income attributable to non-controlling interests	Net income attributable to non-controlling interests	4		3		25		26		Net income attributable to non-controlling interests	5		4		27		25

Net non-controlling interests acquired / (disposed)		0		(100)		(1)		95
Net non-controlling interests disposed										Net non-controlling interests disposed	—		—		—		(1)
Distributions and other changes	Distributions and other changes	(9)		2		(13)		(17)		Distributions and other changes	(7)		(9)		(29)		(13)

Balance, end of period	Balance, end of period	$	161	$	177	$	161	$	177	Balance, end of period	$	154	$	161	$	154	$	161
TOTAL EQUITY	TOTAL EQUITY	$	8,752	$	7,797	$	8,752	$	7,797	TOTAL EQUITY	$	9,888	$	8,752	$	9,888	$	8,752
Dividends declared per share	Dividends declared per share	$	0.93	$	0.455	$	1.840	$	1.740	Dividends declared per share	$	1.07	$	0.93	$	2.00	$	1.84

The accompanying notes are an integral part of these unaudited consolidated statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Nature of Operations

Marsh & McLennan Companies, Inc. ~~and its consolidated subsidiaries~~ (the "Company" or "Marsh McLennan") is, a global professional services firm, ~~offering~~is organized based on the different services that it offers. Under this structure, the Company’s 2 business segments are Risk and Insurance Services and Consulting.

The Risk and Insurance Services segment ("RIS") provides risk management solutions, services, advice and insurance broking, reinsurance broking and insurance program management services for businesses, public entities, insurance companies, associations, professional services organizations, and private clients. The Company conducts business in this segment through Marsh and Guy Carpenter. Marsh advises individual and commercial clients of all sizes on insurance broking and innovative risk management solutions. Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and pursue emerging opportunities.

The Company conducts business in its Consulting segment through Mercer and Oliver Wyman Group. Mercer provides consulting expertise, advice, services and solutions in ~~risk, strategy~~the areas of health, wealth and ~~people. Its businesses include: Marsh, the insurance broker, intermediary~~career consulting services and ~~risk advisor; Guy Carpenter, the risk and reinsurance specialist; Mercer, the provider of HR and Investment related financial advice and services; and~~products. Oliver Wyman Group ~~the~~provides specialized management and economic and brand ~~consultancy. With 76,000 colleagues worldwide and annual revenue of $17 billion, the Company provides analysis, advice and transactional capabilities to clients in more than 130 countries.~~consulting services.

Business Update Related To COVID-19

The ~~Coronavirus (COVID-19)~~World Health Organization declared COVID-19 a pandemic in March 2020. The pandemic has impacted ~~essentially~~businesses globally including virtually every geography in which the Company operates. Governments ~~implemented~~continue to ease restrictions or fully reopen their economies, as the various ~~restrictions around~~vaccines are effective in mitigating the ~~world, including closure of non-essential businesses, travel, shelter-in-place requirements for citizens and other restrictions.~~

~~Through the end~~effects of the ~~third quarter,~~virus. Our businesses have been resilient throughout the pandemic and demand for our advice and services remains strong as the global economic conditions improve.

Although the vast majority of ~~the Company’s~~ colleagues ~~have continued working~~continue to work in a remote ~~work~~ environment, ~~with minimal disruption~~the Company has provided guidelines on a gradual and phased return to the ~~Company as a whole~~office depending on the level of virus containment and ~~its ability to serve clients.~~local health and safety regulations in each geography. The safety and well-being of our colleagues ~~continues to be our first priority.~~

~~As many countries have begun to re-open their economies, there are various conditions imposed by each jurisdiction,~~is paramount and new restrictions may be imposed based on local circumstances. The Company has re-opened offices in various locations around the world, while ensuring that it continues to adhere to guidelines and orders issued by national, state and local governments. The timing of office re-openings will vary based on the conditions and restrictions in each location, but it remains uncertain the extent to which colleagues will return to offices for the remainder of the year and into 2021. However, the Company expects ~~it will~~to continue ~~its ability~~ to service clients effectively ~~while~~in the current remote environment and as colleagues ~~remain~~gradually return to the office.

The Company had strong revenue growth through the first nine months of 2021 and benefited from the continued recovery of the global economy. However, uncertainty remains in ~~a remote work environment.~~

~~The~~the economic outlook and the ultimate extent of ~~the~~ COVID-19 impact to the Company will depend on ~~numerous evolving factors and~~ future developments that it is ~~not able~~unable to ~~predict. Factors that could adversely affect the Company’s financial statements related to the financial and operational impact~~predict, including new "waves" of ~~COVID-19 are outlined in “Item 1A - Risk Factors” in the Company’s Form 10-Q for the quarter ended March 31, 2020.~~

~~JLT Acquisition~~

~~On April 1, 2019, the Company completed its acquisition (the "Transaction") of all~~infection from emerging variants of the ~~outstanding shares~~virus, potential renewed restrictions and mandates by various governments or agencies, and the distribution and uptake of Jardine Lloyd Thompson Group plc ("JLT"), a public company organized under the laws of England and Wales. JLT's results of operations for the three and nine month periods ended September 30, 2020 are included in the Company's results of operations. The Company's results for the nine months ended September 30, 2019 do not reflect JLT’s results of operations for the three months ended March 31, 2019 and therefore may affect comparability.vaccines.

2. Principles of Consolidation and Other Matters

The Company prepared the consolidated financial statements included herein ~~have been prepared by the Company~~ pursuant to the rules and regulations of the Securities and Exchange Commission. ~~While~~For interim filings, certain information and ~~footnote~~ disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and ~~regulations for interim filings, the~~regulations. The Company believes that the information and disclosures presented are adequate to make such information and disclosures not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 (the ~~"2019~~"2020 Form 10-K").

The financial information contained herein reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the Company’s consolidated financial statements as of and for the ~~three and~~ nine ~~month periods~~months ended September 30, ~~2020~~2021 and ~~2019.~~2020.

Estimates: The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. On an ongoing basis, the Company evaluates its estimates, judgments and methodologies. The estimates are based on historical experience and on various other assumptions that the Company believes are reasonable. Such matters include:

•the allowance for current expected credit losses on receivables

•estimates of revenue

•impairment assessments and charges

•recoverability of long-lived assets

•liabilities for errors and omissions

•deferred tax assets, uncertain tax positions and income tax expense

•share-based and incentive compensation expense

•useful lives assigned to long-lived assets, and depreciation and amortization

•fair value estimates of contingent consideration receivable or payable related to acquisitions or dispositions

The Company believes these estimates are reasonable based on information currently available at the time they are made. Management has made estimates of the impact of COVID-19 within the Company’s financial statements and there may be changes to those estimates in future periods. In most situations where estimates, fair values or recoverability of assets is dependent upon short or long term projections of cash flows, revenues or earnings before interest, taxes, depreciation and amortization ("EBITDA"), the Company has based its projections assuming the gradual lifting of global lockdowns through the rest of 2020 and into 2021. The Company ~~has~~ also considered any COVID-19 potential impacts to its customer base in various industries and geographies. Insurance exposures subject to variable factors are subject to mid-term and end of term adjustments, as well as policy audits, which may reduce premiums and corresponding commissions. Estimates were updated based on internal and industry specific economic data. The ultimate extent to which ~~the~~ COVID-19 ~~pandemic~~ will directly or indirectly impact the Company’s businesses, results of operations and financial condition will depend on numerous evolving factors and future developments that ~~are highly uncertain, including new information that may emerge concerning COVID-19 and the actions taken~~it is not able to ~~contain it or treat it, and the economic impact on local, regional, national and international customers and markets.~~predict. Actual results may differ from these ~~estimates.~~estimates.

Cash and Cash Equivalents

Cash and cash equivalents primarily consist of certificates of deposit and time deposits, with original maturities of three months or less, and money market funds. The estimated fair value of the Company's cash and cash equivalents approximates their carrying value. The Company is required to maintain operating funds primarily related to regulatory requirements outside of the United States or as collateral under captive insurance arrangements. At September 30, ~~2020,~~2021, the Company maintained ~~$247~~$306 million compared to ~~$197~~$270 million at December 31, ~~2019~~2020 related to these regulatory requirements.

Allowance for ~~Current Expected~~ Credit Losses on Accounts Receivable

The Company’s policy for providing an allowance for ~~current expected~~ credit losses ~~(“CECL”)~~ on its accounts receivable is based on ~~management’s best estimate~~a combination of ~~amounts that will be uncollectible primarily based on the Company’s~~factors, including historical ~~experience~~write-offs, aging of ~~collections in its various businesses~~balances, and other ~~events that may affect the net realizable value of receivables.~~qualitative and quantitative analyses. The charge related to expected credit losses was immaterial to the consolidated statement of income infor the three and nine ~~month periods~~months ended September 30, 2021 and 2020.

Investments

The caption "Investment income (loss) ~~income"~~" in the consolidated statements of income comprises realized and unrealized gains and losses from investments recognized in earnings. It includes, when applicable, other than temporary declines in the value of securities, mark-to-market increases or decreases in equity investments with readily determinable fair values and equity method gains or losses on the Company's investments in private equity funds.

The Company holds investments in certain private equity funds that are accounted for ~~under~~in accordance with the equity method of accounting using a consistently applied three-month lag period adjusted for any known significant changes from the lag period to the reporting date of the Company. The underlying private equity funds follow investment company accounting, where investments within the fund are carried at fair value. Investment gains or losses for the Company's proportionate share of the change in fair value of the funds are recorded in earnings. Investments

accounted for using the equity method of accounting are included in "other assets" in the consolidated balance sheets.

The Company recorded net ~~investme~~ntinvestment income of $13 million and $43 million for the three and nine months ended September 30, 2021 compared to net investment losses of ~~$14~~$14 million and $47 million for the ~~three and nine month~~same periods ~~ended September 30, 2020~~last

year. The income in 2021 is primarily driven by gains in the Company's private equity investments compared to ~~net investment income of $7 million and $20 million~~losses for the ~~three and nine month~~same periods ~~ended September 30, 2019.~~in prior year. The net investment loss reported in the third quarter of 2020 is primarily

due to the mark-to-market change related to the Company's investment in Alexander Forbes ("AF"). The net

investment loss for the nine months ended September 30, 2020 also includes a loss ofof $23 million from the sale of

shares of AF during the second quarter of 2020, as well as losses re~~lated~~related to its private equity fund investments. The three and nine month periods ended September 30, 2019 include gains of $4 million and $10 million related to mark-to-market changes in equity securities and gains of $3 million and $10 million related to investments in private equity funds and other investments.

Income Taxes

The Company's effective tax rate in the third quarter of ~~2020~~2021 was ~~30.3%~~24.2% compared with ~~26.0%~~30.3% in the third quarter of ~~2019.~~2020. The effective tax rates for the ~~first~~ nine months ended September 30, 2021 and 2020 were 27.1% and 26.0%, respectively.

The rate in the third quarter of ~~2020~~2021 reflects tax benefits from planning implemented in the period that postponed the utilization of current-year losses in the U.K. to a future year when the tax rate will be 25%, additional tax benefits related to share-based compensation offset by changes to uncertain tax positions, deferred tax and ~~2019 were 26.0%~~other tax adjustments. The rate in the nine months ended September 30, 2021 reflects the charge recorded in the second quarter of approximately $100 million to re-measure the Company’s U.K. deferred tax assets and ~~27.8%~~liabilities upon the enactment of legislation on June 10, 2021, commonly referred to as the "Finance Act 2021". The legislation increased the U.K. corporate income tax rate from 19% to 25% effective April 1, 2023. This is the most significant discrete item in the year-to-date period, increasing the Company’s effective tax rate by 3.1% for the nine months ended September 30, 2021.

The rate in the third quarter and ~~first~~ nine months ofended September 30, 2020 reflects costs of re-measuring the Company’s U.K. deferred tax ~~liability for~~assets and liabilities upon the enactment of legislation that cancelled a scheduled 2% reduction in the U.K. corporate income tax rate, partially offset by tax benefits ~~related to~~for the implementation of a new international funding structure ~~implemented~~ to facilitate global staffing and contracting.

The rate in the first nine months of 2019 reflects discrete adjustments related to the JLT acquisition, including tax on the disposition of JLT’s aerospace business and nondeductible expenses incurred in connection with the JLT Transaction. The tax rates in both periods reflect the impact of discrete tax items such as excess tax benefits related to share-based compensation, ~~changes in~~enacted tax legislation, changes in uncertain tax positions, deferred tax adjustments and nontaxable adjustments to contingent acquisition consideration.

The Company's tax rate reflects its income, statutory tax rates, and tax planning in the various jurisdictions in which it operates. Significant judgment is required in determining the annual effective tax rate and in evaluating uncertain tax positions.

Losses in one jurisdiction, generally, cannot offset earnings in another, and within certain jurisdictions profits and losses may not offset between entities. Consequently, losses in certain jurisdictions may require valuation allowances affecting the effective tax rate, depending on estimates of the realizability of associated deferred tax assets. The tax rate is also sensitive to changes in unrecognized tax benefits, including the impact of settled tax audits and expired statutes of limitation.

Changes in tax laws or tax rulings may have a significant impact on our effective tax rate. The Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in tax returns. The Company's gross unrecognized tax benefits ~~increased from $86~~was $101 million at September 30, 2021 and $98 million at December 31, ~~2019 to $102 million at September 30, 2020 due to net changes to tax positions of prior years and current year accruals, offset by expirations of statutes of limitation.~~2020. It is reasonably possible that the total amount of unrecognized tax benefits will decrease between 0zero and approximately ~~$22~~$33 million within the next twelve months due to settlements of audits and expirations of statutes of limitation.

Integration and Restructuring Charges

Severance and related costs are recognized based on amounts due under established severance plans or estimates of one-time benefits that will be provided. Typically, severance benefits are recognized when the impacted colleagues are notified of their expected termination and such termination is expected to occur within the legally required notification period. These costs are included in compensation and benefits in the consolidated statements of income.

Costs for real estate consolidation are recognized based on the type of cost, and the expected future use of the facility. For locations where the Company does not expect to sub-lease the property, the amortization of any right-of-use asset is accelerated from the decision date to the cease use date. For locations where the Company expects to sub-lease the properties subsequent to its vacating the property, the right-of-use asset is reviewed for potential impairment at the earlier of the cease use date or the date a sub-lease is signed. To determine the amount of impairment, the fair value of the right-of-use asset is determined based on the present value of the estimated net cash flows related to the property. Contractual costs outside of the right-of-use asset are recognized based on the net present value of expected future cash outflows for which the Company will not receive any benefit. Such

amounts are ~~reliant~~based on estimates of future sub-lease income to be received and future contractual costs to be incurred. These costs are included in other operating expenses in the consolidated statements of income.

Other costs related to integration and restructuring, such as moving, legal or consulting costs are recognized as incurred. These costs are included in other operating expenses in the consolidated statements of income.

3. Revenue

The core principle of the revenue recognition guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ~~To achieve that principle, the~~The entity applies the following ~~steps:~~steps to achieve that principle: identify the contract(s) with the customer, identify the performance obligations in the contract(s), determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. ~~Under the accounting guidance, a~~A performance obligation is satisfied either at a “point in time” or “over time” depending on the nature of the product or service provided, and the specific terms of the contract with customers.

The Company's revenue recognition guidance is provided in more detail in Note 2 of the consolidated financial statements and the notes ~~thereto~~ included in ~~2019~~ Form 10-K for the year ended December 31, ~~2019.~~2020.

The following schedule disaggregates components of the Company's revenue:

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2020 2019 2020 2019
Marsh:
EMEA $ 536 $ 536 $ 1,887 $ 1,821
Asia Pacific 254 242 790 698
Latin America 93 110 283 304
Total International 883 888 2,960 2,823
U.S./Canada 1,126 1,014 3,271 2,972
Total Marsh 2,009 1,902 6,231 5,795
Guy Carpenter 274 273 1,534 1,328
Subtotal 2,283 2,175 7,765 7,123
Fiduciary interest income 8 31 40 80
Total Risk and Insurance Services $ 2,291 $ 2,206 $ 7,805 $ 7,203
Mercer:
Wealth $ 566 $ 592 $ 1,719 $ 1,748
Health 430 441 1,348 1,341
Career 220 247 549 606
Total Mercer 1,216 1,280 3,616 3,695
Oliver Wyman 480 505 1,458 1,563
Total Consulting $ 1,696 $ 1,785 $ 5,074 $ 5,258


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Marsh:
EMEA	$	600	$	536	$	2,233	$	1,887
Asia Pacific	281		254		902		790
Latin America	105		93		298		283
Total International	986		883		3,433		2,960
U.S./Canada	1,366		1,126		3,894		3,271
Total Marsh	2,352		2,009		7,327		6,231
Guy Carpenter	314		274		1,697		1,534
Subtotal	2,666		2,283		9,024		7,765
Fiduciary interest income	4		8		12		40
Total Risk and Insurance Services	$	2,670	$	2,291	$	9,036	$	7,805
Mercer:


Wealth	$	613	$	566	$	1,861	$	1,719
Health	449		430		1,398		1,348
Career	253		220		618		549
Total Mercer	1,315		1,216		3,877		3,616
Oliver Wyman Group	610		480		1,813		1,458
Total Consulting	$	1,925	$	1,696	$	5,690	$	5,074

The Company recognizes commission revenue from arrangements for a significant portion of its brokerage arrangements at a point in time aton the effective date of the underlying policy. Commission revenue is estimated using historical information about the risks to be covered over the policy period, some of which are dependent on variable factors such as number of employees covered, covered payroll, airline passenger miles flown, shipped tonnage of marine cargo and others.

The following schedule provides contract assets and contract liabilities information from contracts with ~~customers.~~customers:

(In millions) September 30, 2020 December 31, 2019
Contract Assets $ 257 $ 207
Contract Liabilities $ 648 $ 593


(In millions)	September 30, 2021		December 31, 2020
Contract assets	$	307	$	236
Contract liabilities	$	738	$	676

The Company records accounts receivable when the right to consideration is unconditional, subject only to the passage of time. Contract assets primarily relate to quota share reinsurance brokerage and contingent insurer

revenue. The Company does not have the right to bill and collect revenue for quota share brokerage until the underlying policies written by the ceding insurer attach to the treaty. Contract assets are included in other current

assets in the Company's consolidated balance ~~sheet.~~sheets. Contract liabilities primarily relate to the advance consideration received from customers. Contract liabilities are included in current liabilities in the Company's consolidated balance ~~sheet.~~sheets. Revenue recognized in the first nine months of ~~2020~~2021 and ~~2019~~2020 that was included in the contract liability balance at the beginning of each of those years was ~~$420~~$511 million and ~~$378~~$420 million, respectively.

The amount of revenue recognized in the first nine months of ~~2020~~2021 and ~~2019~~2020 from performance obligations satisfied in previous periods, mainly due to variable consideration from contracts with insurers, quota share business and consulting contracts previously considered constrained was ~~$84~~$68 million and ~~$67~~$84 million, respectively.

The Company applies the practical expedient and ~~therefore~~ does not disclose the value of unsatisfied performance obligations for (1) contracts with original contract terms of one year or less and (2) contracts where the Company has the right to invoice for services performed. The revenue expected to be recognized in future periods during the non-cancellable term of existing contracts greater than one year that is related to performance obligations that are unsatisfied or partially satisfied at the end of the reporting period is approximately ~~$46~~$54 million for Marsh, ~~$181~~$204 million for Mercer and $2$4 million for Oliver ~~Wyman.~~Wyman Group. The Company expects revenue in ~~2021,~~ 2022, 2023, 2024, 2025 and ~~2025~~2026 and beyond of ~~$123~~$143 million, ~~$63~~$66 million, ~~$27~~$31 million, ~~$13~~$14 million and $3$8 million, respectively, related to these performance obligations.

4. Fiduciary Assets and Liabilities

In its capacity as an insurance broker or agent, the Company collects premiums from insureds and, after deducting its commissions, remits the premiums to the respective insurance underwriters. The Company also collects claims or refunds from underwriters on behalf of insureds. ~~Unremitted~~Un-remitted insurance premiums and claims proceeds are held by the Company in a fiduciary capacity. Risk and Insurance Services revenue includes interest on fiduciary funds ("fiduciary interest ~~incom~~e"income") of $8$4 million and ~~$40 million for the three and nine month periods ended September 30, 2020, respectively, and $31 million and $80~~$12 million for the three and nine month periods ended September 30, ~~2019,~~2021, respectively, and $8 million and $40 million for the three and nine month periods ended September 30, 2020, respectively. The decrease in ~~2020~~2021 compared to ~~2019~~2020 reflects the impact of lower interest rates partially offset by a higher level of average invested funds.The Consulting segment recorded fiduciary interest income of less than $1 million for the three months and $1 million for nine month periods ended September 30, 2020, respectively, and less than $1 million and $2 million for the three and nine month periods ended September 30, 2019, respectively. Since fiduciary assets are not available for corporate use, they are shown in the consolidated balance sheets as an offset to fiduciary liabilities.

Net uncollected premiums and claims and the related payables amounted to ~~$11.4~~$12.7 billion at September 30, ~~2020~~2021 and ~~$8.9~~$11.2 billion at December 31, ~~2019.~~2020. The Company is not a principal to the contracts under which the right to receive premiums or the right to receive reimbursement of insured losses arises. Accordingly, net uncollected premiums and claims and the related payables are not assets and liabilities of the Company and are not included in the accompanying consolidated balance sheets.

In certain instances, the Company advances premiums, refunds or claims to insurance underwriters or insureds prior to collection. These advances are made from corporate funds and are reflected in the accompanying consolidated balance sheets as receivables.

5. Per Share Data

Basic net income per share attributable to the Company is calculated by dividing the after-tax income attributable to the Company by the weighted average number of outstanding shares of the Company’s common stock.

Diluted net income per share attributable to the Company is calculated by dividing the after-tax income attributable to the Company by the weighted average number of outstanding shares of the Company’s common stock, which have been adjusted for the dilutive effect of potentially issuable common shares.


Basic and Diluted EPS Calculation	Basic and Diluted EPS Calculation	Three Months Ended September 30,				Nine Months Ended September 30,				Basic and Diluted EPS Calculation	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions, except per share amounts)		2020		2019		2020		2019
(In millions, except per share data)										(In millions, except per share data)	2021		2020		2021		2020
Net income before non-controlling interests	Net income before non-controlling interests	$	320	$	306	$	1,667	$	1,377	Net income before non-controlling interests	$	542	$	320	$	2,367	$	1,667
Less: Net income attributable to non-controlling interests	Less: Net income attributable to non-controlling interests	4		3		25		26		Less: Net income attributable to non-controlling interests	5		4		27		25
Net income attributable to the Company	Net income attributable to the Company	$	316	$	303	$	1,642	$	1,351	Net income attributable to the Company	$	537	$	316	$	2,340	$	1,642
Basic weighted average common shares outstanding	Basic weighted average common shares outstanding	507		506		506		506		Basic weighted average common shares outstanding	506		507		508		506
Dilutive effect of potentially issuable common shares	Dilutive effect of potentially issuable common shares	5		5		5		5		Dilutive effect of potentially issuable common shares	7		5		5		5
Diluted weighted average common shares outstanding	Diluted weighted average common shares outstanding	512		511		511		511		Diluted weighted average common shares outstanding	513		512		513		511
Average stock price used to calculate common stock equivalents	Average stock price used to calculate common stock equivalents	$	114.64	$	99.97	$	107.64	$	94.75	Average stock price used to calculate common stock equivalents	$	151.22	$	114.64	$	133.41	$	107.64

6. Supplemental Disclosures to the Consolidated Statements of Cash Flows

The following schedule provides additional information concerning acquisitions, interest and income taxes paid for the ~~nine-month~~nine month periods ended September 30, ~~2020~~2021 and ~~2019.~~2020.


(In millions)	(In millions)	2020		2019		(In millions)	2021		2020
Assets acquired, excluding cash	Assets acquired, excluding cash	$	795	$	8,619	Assets acquired, excluding cash	$	601	$	795
Liabilities assumed	Liabilities assumed	(73)		(2,758)		Liabilities assumed	(59)		(73)
Non-controlling interests assumed		0		(295)

Contingent/deferred purchase consideration	Contingent/deferred purchase consideration	(163)		(66)		Contingent/deferred purchase consideration	(141)		(163)
Net cash outflow for current year acquisitions	Net cash outflow for current year acquisitions	$	559	$	5,500	Net cash outflow for current year acquisitions	$	401	$	559


(In millions)	(In millions)	2020		2019		(In millions)	2021		2020
Interest paid	Interest paid	$	437	$	387	Interest paid	$	407	$	437
Income taxes paid, net of refunds	Income taxes paid, net of refunds	$	414	$	442	Income taxes paid, net of refunds	$	686	$	414

The classification of contingent consideration in the statement of cash flows is ~~determined by~~dependent upon whether the payment was part of the initial liability established on the acquisition date (financing) or an adjustment to the acquisition date liability (operating).

The following amounts are included in the consolidated statements of cash flows as a financing activity. The Company paid deferred and contingent consideration of ~~$125~~$110 million for the nine months ended September 30, ~~2020.~~2021. This consisted of deferred purchase consideration related to prior years' acquisitions of $84 million and contingent purchase consideration of $26 million. Cash flows from financing activities also reflect the receipt of contingent consideration of $71 million related to prior year dispositions. For the nine months ended September 30, 2020, the Company paid deferred and contingent consideration of $125 million, consisting of deferred purchase consideration related to prior years' acquisitions of $60 million and contingent consideration of $65 million. For the nine months ended September 30, 2019, the Company paid deferred and contingent consideration of $60 million, consisting of deferred purchase consideration related to prior years' acquisitions of $37 million and contingent consideration of $23 million.

The following amounts are included in the operating section of the consolidated statements of cash flows. For the nine months ended September 30, 2021, the Company recorded an expense for adjustments to contingent consideration liabilities of $35 million and made contingent consideration payments of $46 million. In addition, the Company recorded income of $24 million, primarily related to the settlement of contingent consideration receivables and received cash of $19 million related to prior year dispositions. For the nine months ended September 30, 2020, the Company recorded an expense for adjustments to contingent consideration liabilities of $22 million and made contingent consideration payments of $36 million. For the nine months ended September 30, 2019, the Company recorded an expense for adjustments to contingent consideration liabilities of $26 million and made contingent consideration payments of $35 million.

The Company had non-cash issuances of common stock under its share-based payment plan of ~~$217~~$225 million and ~~$164~~$217 million for the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively. The Company recorded stock-based compensation expense for equity awards related to restricted stock units, performance stock units and stock options of ~~$219~~$263 million and ~~$184~~$219 million for the ~~nine-month periods~~nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

7. Other Comprehensive Income (Loss)

The changes, net of tax, in the balances of each component of Accumulated Other Comprehensive Income ("AOCI") for the three and ~~nine-month periods~~nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, including amounts reclassified out of AOCI, are as follows:

(In millions) Pension/Post-Retirement Plans Gains (Losses) Foreign Currency Translation Gains (Losses) Total Gains (Losses)
Balance as of July 1, 2020 $ (3,346) $ (2,236) $ (5,582)
Other comprehensive (loss) income before reclassifications (94) 497 403
Amounts reclassified from accumulated other comprehensive income 31 0 31
Net current period other comprehensive (loss) income (63) 497 434
Balance as of September 30, 2020 $ (3,409) $ (1,739) $ (5,148)


(In millions)	Pension/Post-Retirement Plans Gains (Losses)		Foreign Currency Translation Gains (Losses)		Total Gains (Losses)
Balance as of July 1, 2021	$	(4,102)	$	(1,051)	$	(5,153)
Other comprehensive income (loss) before reclassifications	115		(346)		(231)
Amounts reclassified from accumulated other comprehensive income	39		—		39
Net current period other comprehensive income (loss)	154		(346)		(192)
Balance as of September 30, 2021	$	(3,948)	$	(1,397)	$	(5,345)

(In millions) Pension/Post-Retirement Plans Gains (Losses) Foreign Currency Translation Gains (Losses) Total Gains (Losses)
Balance as of July 1, 2019 $ (2,942) $ (1,585) $ (4,527)
Other comprehensive income (loss) before reclassifications 56 (475) (419)
Amounts reclassified from accumulated other comprehensive income 15 0 15
Net current period other comprehensive income (loss) 71 (475) (404)
Balance as of September 30, 2019 $ (2,871) $ (2,060) $ (4,931)


(In millions)	(In millions)	Pension/Post-Retirement Plans Gains (Losses)		Foreign Currency Translation Gains (Losses)		Total Gains (Losses)		(In millions)	Pension/Post-Retirement Plans Gains (Losses)		Foreign Currency Translation Gains (Losses)		Total Gains (Losses)
Balance as of December 31, 2019		$	(3,512)	$	(1,543)	$	(5,055)

Other comprehensive income (loss) before reclassifications		12		(196)		(184)
Balance as of July 1, 2020								Balance as of July 1, 2020	$	(3,346)	$	(2,236)	$	(5,582)
Other comprehensive (loss) income before reclassifications								Other comprehensive (loss) income before reclassifications	(94)		497		403
Amounts reclassified from accumulated other comprehensive income	Amounts reclassified from accumulated other comprehensive income	91		0		91		Amounts reclassified from accumulated other comprehensive income	31		—		31
Net current period other comprehensive income (loss)		103		(196)		(93)
Net current period other comprehensive (loss) income								Net current period other comprehensive (loss) income	(63)		497		434
Balance as of September 30, 2020	Balance as of September 30, 2020	$	(3,409)	$	(1,739)	$	(5,148)	Balance as of September 30, 2020	$	(3,409)	$	(1,739)	$	(5,148)

(In millions) Pension/Post-Retirement Plans Gains (Losses) Foreign Currency Translation Gains (Losses) Total Gains (Losses)
Balance as of December 31, 2018 $ (2,953) $ (1,694) $ (4,647)
Other comprehensive income (loss) before reclassifications 26 (366) (340)
Amounts reclassified from accumulated other comprehensive income 56 0 56
Net current period other comprehensive income (loss) 82 (366) (284)
Balance as of September 30, 2019 $ (2,871) $ (2,060) $ (4,931)



(In millions)	Pension/Post-Retirement Plans Gains (Losses)		Foreign Currency Translation Gains (Losses)		Total Gains (Losses)
Balance as of December 31, 2020	$	(4,126)	$	(984)	$	(5,110)

Other comprehensive income (loss) before reclassifications	63		(413)		(350)
Amounts reclassified from accumulated other comprehensive income	115		—		115
Net current period other comprehensive income (loss)	178		(413)		(235)
Balance as of September 30, 2021	$	(3,948)	$	(1,397)	$	(5,345)



(In millions)	Pension/Post-Retirement Plans Gains (Losses)		Foreign Currency Translation Gains (Losses)		Total Gains (Losses)
Balance as of December 31, 2019	$	(3,512)	$	(1,543)	$	(5,055)

Other comprehensive income (loss) before reclassifications	12		(196)		(184)
Amounts reclassified from accumulated other comprehensive income	91		—		91
Net current period other comprehensive income (loss)	103		(196)		(93)
Balance as of September 30, 2020	$	(3,409)	$	(1,739)	$	(5,148)

The components of other comprehensive income (loss) for the three and ~~nine-month~~nine month periods ended September 30, ~~2020~~2021 and ~~2019~~2020 are as follows:


Three Months Ended September 30,	Three Months Ended September 30,	2020						2019						Three Months Ended September 30,	2021						2020
(In millions)	(In millions)	Pre-Tax		Tax (Credit)		Net of Tax		Pre-Tax		Tax (Credit)		Net of Tax		(In millions)	Pre-Tax		Tax (Credit)		Net of Tax		Pre-Tax		Tax (Credit)		Net of Tax
Foreign currency translation adjustments	Foreign currency translation adjustments	$	500	$	3	$	497	$	(475)	$	0	$	(475)	Foreign currency translation adjustments	$	(346)	$	—	$	(346)	$	500	$	3	$	497

Pension/post-retirement plans:	Pension/post-retirement plans:													Pension/post-retirement plans:
Amortization of (gains) losses included in net periodic pension cost:
Prior service credits (a)		0		0		0		(1)		(1)		0
Amortization of gains included in net periodic pension cost:														Amortization of gains included in net periodic pension cost:

Net actuarial losses (a)	Net actuarial losses (a)	40		9		31		25		6		19		Net actuarial losses (a)	52		13		39		40		9		31
Effect of remeasurement (a)		0		0		0		(8)		(2)		(6)

Effect of settlement (a)		0		0		0		2		0		2

Subtotal	Subtotal	40		9		31		18		3		15		Subtotal	52		13		39		40		9		31
Foreign currency translation adjustments	Foreign currency translation adjustments	(113)		(19)		(94)		64		8		56		Foreign currency translation adjustments	88		21		67		(113)		(19)		(94)

Pension/post-retirement plans (losses) gains		(73)		(10)		(63)		82		11		71
Other comprehensive income (loss)		$	427	$	(7)	$	434	$	(393)	$	11	$	(404)
Effect of remeasurement														Effect of remeasurement	64		16		48		—		—		—

Pension/post-retirement plans gains (losses)														Pension/post-retirement plans gains (losses)	204		50		154		(73)		(10)		(63)
Other comprehensive (loss) income														Other comprehensive (loss) income	$	(142)	$	50	$	(192)	$	427	$	(7)	$	434
(a) Components of net periodic pension cost are included in other net benefit credits in the consolidated statements of income. Income tax expense on net actuarial losses are included in income tax expense.	(a) Components of net periodic pension cost are included in other net benefit credits in the consolidated statements of income. Income tax expense on net actuarial losses are included in income tax expense.													(a) Components of net periodic pension cost are included in other net benefit credits in the consolidated statements of income. Income tax expense on net actuarial losses are included in income tax expense.


Nine Months Ended September 30,	Nine Months Ended September 30,	2020						2019						Nine Months Ended September 30,	2021						2020
(In millions)	(In millions)	Pre-Tax		Tax (Credit)		Net of Tax		Pre-Tax		Tax (Credit)		Net of Tax		(In millions)	Pre-Tax		Tax (Credit)		Net of Tax		Pre-Tax		Tax (Credit)		Net of Tax
Foreign currency translation adjustments	Foreign currency translation adjustments	$	(200)	$	(4)	$	(196)	$	(366)	$	0	$	(366)	Foreign currency translation adjustments	$	(413)	$	—	$	(413)	$	(200)	$	(4)	$	(196)

Pension/post-retirement plans:	Pension/post-retirement plans:													Pension/post-retirement plans:
Amortization of (gains) losses included in net periodic pension cost:	Amortization of (gains) losses included in net periodic pension cost:													Amortization of (gains) losses included in net periodic pension cost:
Prior service credits (a)	Prior service credits (a)	(1)		0		(1)		(2)		(1)		(1)		Prior service credits (a)	(1)		—		(1)		(1)		—		(1)
Net actuarial losses (a)	Net actuarial losses (a)	120		28		92		77		18		59		Net actuarial losses (a)	156		40		116		120		28		92
Effect of remeasurement (a)		0		0		0		(9)		(2)		(7)
Subtotal														Subtotal	155		40		115		119		28		91
Foreign currency translation adjustments														Foreign currency translation adjustments	7		1		6		17		5		12
Other adjustments														Other adjustments	(7)		(2)		(5)		—		—		—
Effect of remeasurement														Effect of remeasurement	77		17		60		—		—		—

Effect of settlement (a)		0		0		0		6		1		5
Subtotal		119		28		91		72		16		56

Foreign currency translation adjustments		17		5		12		30		4		26
Effect of settlement														Effect of settlement	2		—		2		—		—		—

Pension/post-retirement plans gains	Pension/post-retirement plans gains	136		33		103		102		20		82		Pension/post-retirement plans gains	234		56		178		136		33		103
Other comprehensive income (loss)		$	(64)	$	29	$	(93)	$	(264)	$	20	$	(284)
Other comprehensive (loss) income														Other comprehensive (loss) income	$	(179)	$	56	$	(235)	$	(64)	$	29	$	(93)
(a) Components of net periodic pension cost are included in other net benefit credits in the consolidated statements of income. Income tax expense on net actuarial losses are included in income tax expense.	(a) Components of net periodic pension cost are included in other net benefit credits in the consolidated statements of income. Income tax expense on net actuarial losses are included in income tax expense.													(a) Components of net periodic pension cost are included in other net benefit credits in the consolidated statements of income. Income tax expense on net actuarial losses are included in income tax expense.

8. Acquisitions and Dispositions

The Company’s acquisitions have been accounted for as business combinations. Net assets and results of operations are included in the Company’s consolidated financial statements commencing at the respective purchase closing dates. In connection with acquisitions, the Company records the estimated values of the net tangible assets and the identifiable intangible assets purchased, which typically consist of customer relationships, developed technology, trademarks and non-compete agreements. The valuation of purchased intangible assets involves significant estimates and assumptions. The Company estimates the fair value of purchased intangible assets, primarily using the income approach, by determining the present value of future cash flows over the remaining economic life of the respective assets. The significant estimates and assumptions used in this approach include the determination of the discount rate, economic life, future revenue growth rates, expected account attrition rates and earnings margins. Refinement and completion of final valuation of net assets acquired could affect the carrying value of tangible assets, goodwill and identifiable intangible assets.

The Risk and Insurance Services segment completed 43 acquisitions during the first nine months ~~of 2020.~~ended September 30, 2021:

•~~January~~April – Marsh & McLennan Agency ("MMA") acquired ~~Momentous~~PayneWest Insurance, ~~Brokerage~~ Inc., a ~~California-based~~Montana-based full-service ~~risk management and employee benefits firm specializing in high net worth private client services and~~broker providing business insurance, ~~solutions for the entertainment industry, and Ironwood Insurance Services, LLC, an Atlanta-based broker that provides commercial property/casualty insurance,~~surety, employee benefits and ~~private client solutions~~personal insurance services to ~~mid-size businesses~~companies and individuals, ~~across~~and The Pryor Group, LLC, a Texas-based full-service broker providing business insurance with a specialty in quick service restaurants and the ~~U.S.~~personal lines of franchise owners.

•~~April~~September – MMA acquired ~~Assurance Holdings,~~Vaaler Insurance, Inc., ~~an Illinois-based full service independent brokerage agency~~a North Dakota-based insurance broker providing business insurance, employee health and benefits, ~~private client insurance,~~ and ~~retirement services to businesses~~personal lines solutions, with specialized expertise in the construction, education, and ~~individuals across the U.S.~~

•~~June - MMA acquired Nico Insurance Services, Inc., a California-based agency providing employee benefits solutions to groups and individuals.~~healthcare industries.

Total purchase consideration for acquisitions made during the nine months ended September 30, ~~2020~~2021 was ~~$742~~$546 million, which consisted of cash paid of ~~$579~~$405 million and deferred purchase consideration and estimated contingent consideration of ~~$163~~$141 million. Contingent consideration arrangements are based primarily on earnings before interest, tax, depreciation and amortization ("EBITDA") or revenue targets over a period of two to four years. The Company also paid ~~$60~~$84 million of deferred purchase consideration and ~~$101~~$72 million of contingent consideration related to acquisitions made in prior years. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment until purchase accounting is finalized.

The following table presents the preliminary allocation of purchase consideration to the assets acquired and liabilities assumed during ~~2020~~2021 based on the estimated fair values for the acquisitions as of their respective acquisition dates:

Acquisitions through September 30, ~~2020~~2021

(In millions)

Cash

~~579~~$

405

Estimated fair value of deferred/contingent consideration

~~163~~141

Total consideration

~~742~~546

Allocation of purchase price:

Cash and cash equivalents

20$

Accounts receivable, net

2732

Fixed assets, net

155

Other intangible assets

~~280~~190

Goodwill

~~462~~374

~~Other assets~~

Total assets acquired

~~815~~605

Current liabilities

2227

Other liabilities

5132

Total liabilities assumed

7359

Net assets acquired

~~742~~546

The purchase price allocation ~~above~~for assets acquired and liabilities assumed is based on estimates that are preliminary in nature and subject to adjustments, which could be material. Any necessary adjustments must be finalized during the measurement period, which for a particular asset, liability, or non-controlling interest ends once the acquirer determines that either (1) the necessary information has been obtained or (2) the information is not available. However, the measurement period for all items is limited to one year from the acquisition date.

The estimation of fair value requires numerous judgments, assumptions and estimates about future events and uncertainties, which could materially impact these values, and the related amortization, where applicable, in the Company’s results of operations.

The following chart provides information about intangible assets acquired during ~~2020:~~2021:

Intangible assets through September 30, ~~2020~~2021

(In millions)

Amount

Weighted Average Amortization Period

Client relationships

~~257~~176

~~13.3~~13.7 years

Other

2314

~~4.5~~3.8 years

~~280~~190

The consolidated statements of income include the results of operations of acquired companies since their respective acquisition dates. The consolidated statements of income for the three and nine month periods ended September 30, 2021 include revenue of approximately $38 million and $73 million and operating income of $3 million and $4 million for acquisitions made in 2021. The consolidated statements of income for the three and ninemonth periods ended September 30, 2020 included approximately $52 million and $115 million of revenue, respectively, and operating loss of $8 million and operating income of $3 million, respectively, related to acquisitions made in 2020.

Dispositions

During the first nine months of 2021, the Company sold certain businesses, primarily in the U.S. and the U.K., for cash proceeds of approximately $84 million and recognized a net gain of approximately $50 million, primarily related to the commercial networks business in the U.K. that provided broking and back-office solutions for small independent brokers.

Prior-Year Acquisitions

The Risk and Insurance Services segment completed 7 acquisitions during 2020:

•January – MMA acquired Momentous Insurance Brokerage Inc., a California-based full-service risk management and employee benefits firm specializing in high net worth private client services and insurance solutions for the entertainment industry, and Ironwood Insurance Services, LLC, an Atlanta-based broker that provides commercial property/casualty insurance, employee benefits, and private client solutions to mid-size businesses and individuals across the U.S.

•April – MMA acquired Assurance Holdings, Inc., an Illinois-based full service brokerage providing business insurance, employee benefits, private client insurance, and retirement services to businesses and individuals across the U.S.

•June – MMA acquired Nico Insurance Services, Inc., a California-based agency providing employee benefits solutions to groups and individuals.

•December – MMA acquired Heritage Insurance Services, Inc., a Kentucky-based full service broker that provides commercial property and casualty and personal lines primarily in the trucking and transportation industry, Inspro Insurance, Inc., a Nebraska-based full service broker that provides commercial property and casualty insurance, personal lines and employee benefits services, and Compass Financial Partners, LLC, a North Carolina-based retirement consulting and investment advisory firm.

Total purchase consideration for acquisitions made during the nine months ended September 30, 2020 was approximately $742 million, which consisted of cash paid of $579 million and deferred purchase and estimated contingent consideration of $163 million. Contingent consideration arrangements are based primarily on earnings before interest, tax, depreciation and amortization ("EBITDA") or revenue targets over a period of two to four years. For the first nine months of 2020, the Company also paid $60 million of deferred purchase consideration and $101 million of contingent consideration related to acquisitions made in prior years. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized.

Prior year dispositions

In the first nine months of 2020, the Company sold certain businesses primarily in the U.S., U.K. and Canada for cash proceeds of approximately $93 million. ~~There were 0 material dispositions made in the third quarter of 2020.~~

At December 31, 2019, the Company owned approximately 443 million shares of the common stock of Alexander Forbes ("AF"), a South African company listed on the Johannesburg Stock Exchange, which was accounted for under the equity method of accounting. In February 2020, the Company sold approximately 49 million shares of the common stock of AF, and in May 2020, sold an additional 193 million shares to third parties, leaving the Company with an investment of approximately 201 million shares of the common stock of AF at September 30, 2020. Upon completion of the May transaction, the investment in AF is accounted at fair value, with investment gains and losses recorded as investment income in the consolidated statement of income.

~~Prior-Year Acquisitions~~

On April 1, 2019, the Company completed the JLT Transaction and purchased all of the outstanding shares of JLT. Under the terms of the Transaction, JLT shareholders received £19.15 in cash for each JLT share, which valued JLT’s existing issued and to be issued share capital at approximately £4.3 billion (or approximately $5.6 billion based on an exchange rate of U.S. $1.31:£1). The Company also assumed existing JLT long-term indebtedness of approximately $1 billion. The Company implemented the Transaction by way of a scheme of arrangement under Part 26 of the United Kingdom Companies Act 2006, as amended.

~~The Risk and Insurance Services segment completed 5 other acquisitions during 2019~~.

•~~February – MMA acquired Bouchard Insurance, Inc., a Florida-based full service agency and Employee Benefits Group, Inc., a Maryland-based independent insurance agency.~~

•April – MMA acquired Lovitt & Touche, Inc., an Arizona-based insurance agency and The Centurion Group, LLC, a Pennsylvania-based retirement consulting, asset management and benefit plan advisory firm.

•~~October – MMA acquired Benefits Reports Insurance Services, Inc., a Massachusetts-based independent insurance agency.~~

Total purchase consideration for acquisitions made during the first nine months of 2019 was $5,925 million, which consisted of cash paid of $5,859 million and deferred purchase consideration and estimated contingent consideration of $66 million. Contingent consideration arrangements are primarily based on EBITDA or revenue targets over a period of ~~two~~ to ~~four~~ years. The fair value of the contingent consideration was based on projected revenue or EBITDA of the acquired entities. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized. For the first nine months of 2019, the Company also paid $37 million of deferred purchase consideration and $58 million of contingent consideration related to acquisitions made in prior years.

~~Subsequent to the JLT acquisition, the Company purchased the outstanding non-controlling interests of several JLT subsidiaries for net cash payments of approximately $75 million.~~

~~In January 2019, Marsh increased its equity ownership in Marsh India from 26% to 49%. Marsh India is accounted for under the equity method.~~

~~Prior year dispositions~~

During the third quarter of 2019, the Company completed the sale of a U.S. Specialty business at Marsh and a U.S. large market health and defined benefit business at Mercer for cash proceeds of approximately $60 million. Also, on June 1, 2019, the Company completed its disposition of JLT’s global aerospace business for cash proceeds of $165 millionand contingent consideration receivable of approximately $65 million, based on the aerospace business achieving certain revenue milestones in 2020. The aerospace business was divested as part of the European Commission's approval of the JLT Transaction.

Pro-Forma Information

The following unaudited pro-forma financial data gives effect to the acquisitions made by the Company during ~~2020~~2021 and ~~2019.~~2020. In accordance with accounting guidance related to pro-forma disclosures, the information presented for ~~current year~~ acquisitions made in 2021 is as if they occurred on January 1, ~~2019~~2020 and reflects acquisitions made in ~~2019~~2020 as if they occurred on January 1, ~~2018.~~2019. The unaudited pro-forma information adjusts for the effects of amortization of

acquired ~~intangibles and additional interest expense related to the issuance of debt related to the JLT Transaction.~~intangibles. The unaudited pro-forma financial data is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved if such acquisitions had occurred on the dates indicated, nor is it necessarily indicative of future consolidated results.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(In millions, except per share figures)		2020		2019		2020		2019
(In millions, except per share data)										(In millions, except per share data)	2021		2020		2021		2020
Revenue	Revenue	$	3,968	$	4,016	$	12,859	$	12,979	Revenue	$	4,587	$	4,019	$	14,730	$	12,955

Net income attributable to the Company	Net income attributable to the Company	$	316	$	307	$	1,644	$	1,453	Net income attributable to the Company	$	538	$	322	$	2,345	$	1,655

Basic net income per share attributable to the Company	Basic net income per share attributable to the Company	$	0.62	$	0.61	$	3.25	$	2.87	Basic net income per share attributable to the Company	$	1.06	$	0.63	$	4.62	$	3.27

Diluted net income per share attributable to the Company	Diluted net income per share attributable to the Company	$	0.62	$	0.60	$	3.22	$	2.84	Diluted net income per share attributable to the Company	$	1.05	$	0.63	$	4.57	$	3.24

The consolidated statements of income include the results of operations of acquired companies since their respective acquisition dates. The consolidated statements of income for the three and nine-month periods ended September 30, 2020 include approximately $52 million and $115 million of revenue, respectively, and operating loss of $8 million and operating income of $3 million, respectively, for acquisitions made in 2020. The consolidated statements of income for the three and nine month periods ended September 30, 2019 included approximately $352 million and $848 million, respectively, of revenue, and operating losses of $69 million and $51 million, respectively, related to acquisitions made in 2019.

9. Goodwill and Other Intangibles

The Company is required to assess goodwill and any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred. The Company performs the annual impairment assessment for each of its reporting units during the third quarter of each year. In accordance with applicable accounting guidance, a company can assess qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. Alternatively, the Company may elect to proceed directly to the quantitative goodwill impairment test. In ~~2019, the Company elected to do a quantitative assessment and determined that goodwill was not impaired, as the fair value of each reporting unit exceeded its carrying value by a substantial margin.~~ ~~In 2020,~~2021, the Company elected to perform a qualitative impairment assessment. As part of its assessment, the Company considered numerous factors, ~~including~~ including:

•that the fair value of each reporting unit exceeds its carrying value by a substantial margin based on its most recent ~~estimates,~~ quantitative assessment in 2019;

•whether significant acquisitions or dispositions occurred which might alter the fair value of its reporting ~~units,~~ units;

•macroeconomic conditions and their potential impact on reporting unit fair ~~values,~~ values;

•actual performance compared with budget and prior projections used in its estimation of reporting unit fair ~~values,~~ values;

•industry and market ~~conditions,~~conditions; and

•the year-over-year change in the Company’s share price.

The Company completed its qualitative assessment in the third quarter of ~~2020~~2021 and concluded ~~that a quantitative goodwill impairment test was not required in 2020 and~~ that goodwill was not impaired.

Other intangible assets that are not deemed to have an indefinite life are amortized over their estimated lives and ~~reviewed~~assessed for impairment upon the occurrence of certain triggering events in accordance with applicable accounting literature. Based on its assessment, the Company concluded that other intangible assets were not impaired. The Company does not have any indefinite lived intangible assets.

Changes in the carrying amount of goodwill are as follows:


September 30,	September 30,					September 30,
(In millions)	(In millions)	2020		2019		(In millions)	2021		2020
Balance as of January 1,	Balance as of January 1,	$	14,671	$	9,599	Balance as of January 1,	$	15,517	$	14,671
Goodwill acquired	Goodwill acquired	462		4,962		Goodwill acquired	374		462
Other adjustments(a)	Other adjustments(a)	(99)		(275)		Other adjustments(a)	(243)		(99)
Balance at September 30,	Balance at September 30,	$	15,034	$	14,286	Balance at September 30,	$	15,648	$	15,034

(a) Primarily reflects the impact of foreign ~~exchange and dispositions.~~exchange.

~~The entire amount of goodwill acquired of $462 million in 2020 is related to the Risk and Insurance Services segment, of which $140 million is deductible for tax purposes.~~ The goodwill arising from the acquisitions ~~consists~~in 2021 and 2020 consist largely of the synergies and economies of scale

expected from combining the operations of the Company and the acquired entities and the trained and assembled

workforce acquired.

The goodwill acquired in 2021 and 2020 included approximately $374 million and $462 million, respectively, of which approximately $25 million and $140 million is deductible for tax purposes, and is primarily related to the Risk and Insurance Services segment.

Goodwill allocable to the Company’s reportable segments at September 30, ~~2020~~2021 is as follows: Risk and Insurance Services, ~~$11~~$11.8 billion and Consulting, $4$3.8 billion.

The gross cost and accumulated amortization of identified intangible assets at September 30, ~~2020~~2021 and December 31, ~~2019~~2020 are as follows:


		September 30, 2020						December 31, 2019							September 30, 2021						December 31, 2020
(In millions)	(In millions)	Gross Cost		Accumulated Amortization		Net Carrying Amount		Gross Cost		Accumulated Amortization		Net Carrying Amount		(In millions)	Gross Cost		Accumulated Amortization		Net Carrying Amount		Gross Cost		Accumulated Amortization		Net Carrying Amount
Client Relationships		$	3,644	$	1,095	$	2,549	$	3,494	$	897	$	2,597
Client relationships														Client relationships	$	3,827	$	1,331	$	2,496	$	3,713	$	1,170	$	2,543
Other (a)	Other (a)	381		219		162		380		203		177		Other (a)	367		276		91		386		230		156
Amortized intangibles	Amortized intangibles	$	4,025	$	1,314	$	2,711	$	3,874	$	1,100	$	2,774	Amortized intangibles	$	4,194	$	1,607	$	2,587	$	4,099	$	1,400	$	2,699

(a) Primarily non-compete agreements, trade names and developed technology.

Aggregate amortization expense for the nine months ended September 30, ~~2020~~2021 and ~~2019~~2020 was ~~$265~~$278 million and ~~$235~~$265 million, respectively. The estimated future aggregate amortization expense is as follows:


For the Years Ending December 31,	For the Years Ending December 31,			For the Years Ending December 31,
(In millions)	(In millions)	Estimated Expense		(In millions)	Estimated Expense
2020 (excludes amortization through September 30, 2020)		$	92
2021		351
2021 (excludes amortization through September 30, 2021)				2021 (excludes amortization through September 30, 2021)	$	88
2022	2022	323		2022	329
2023	2023	299		2023	302
2024	2024	286		2024	281
2025				2025	241
Subsequent years	Subsequent years	1,360		Subsequent years	1,346
		$	2,711
Total future amortization				Total future amortization	$	2,587

The developments in the COVID-19 pandemic have resulted in uncertainty in the global economy and volatility in the equity markets. The Company considered whether such events would indicate that identified intangible assets and other long lived assets may not be recoverable. Based on its analysis, the Company concluded that the current events and circumstances related to the COVID-19 pandemic do not indicate that identified intangibles are not recoverable.

10. Fair Value Measurements

Fair Value Hierarchy

The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy as defined by the FASB. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy, for disclosure purposes, is determined based on the lowest level input that is significant to the fair value measurement. Assets and liabilities recorded in the consolidated balance sheets at fair value are categorized based on the inputs in the valuation techniques as follows:

Level 1.Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market (examples include active exchange-traded equity securities and exchange-traded money market mutual funds).

Assets and liabilities measured using Level 1 inputs include exchange-traded equity securities, exchange-traded mutual funds and money market funds.

Level 2.Assets and liabilities whose values are based on the following:

a)Quoted prices for similar assets or liabilities in active markets;

b)Quoted prices for identical or similar assets or liabilities in non-active markets (examples include corporate and municipal bonds, which trade infrequently);

c)Pricing models whose inputs are observable for substantially the full term of the asset or liability (examples include most over-the-counter derivatives, including interest rate and currency swaps); and

d)Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full asset or liability (for example, certain mortgage loans).

Assets and liabilities using Level 2 inputs are related to an equity security.

Level 3.Assets and liabilities whose values are based on prices, or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

Assets and liabilities measured using Level 3 inputs relate to assets and liabilities for contingent purchase consideration.

Valuation Techniques

Equity Securities, Money Market Mutual Funds and Mutual Funds – Level 1

Investments for which market quotations are readily available are valued at the sale price on their principal exchange or, for certain markets, official closing bid price. Money market mutual funds are valued using a valuation technique that results in price per share at $1.00.

Contingent Purchase Consideration Assets and Liabilities – Level 3

Purchase consideration for some acquisitions and dispositions made by the Company include contingent consideration arrangements. Contingent consideration arrangements are based primarily on EBITDA or revenue targets over a period of two to four years. The fair value of the contingent purchase consideration asset and liability is estimated as the present value of future cash flows to be paid, based on projections of revenue and earnings and related targets of the acquired and disposed entities.

The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, ~~2020~~2021 and December 31, ~~2019.~~2020:


		Identical Assets (Level 1)				Observable Inputs (Level 2)				Unobservable Inputs (Level 3)				Total					Identical Assets (Level 1)				Observable Inputs (Level 2)				Unobservable Inputs (Level 3)				Total
(In millions)	(In millions)	09/30/20		12/31/19		09/30/20		12/31/19		09/30/20		12/31/19		09/30/20		12/31/19		(In millions)	09/30/21		12/31/20		09/30/21		12/31/20		09/30/21		12/31/20		09/30/21		12/31/20
Assets:	Assets:																	Assets:
Financial instruments owned:	Financial instruments owned:																	Financial instruments owned:
Exchange traded equity securities(a)	Exchange traded equity securities(a)	$	45	$	4	$	0	$	0	$	0	$	0	$	45	$	4	Exchange traded equity securities(a)	$	60	$	59	$	—	$	—	$	—	$	—	$	60	$	59
Mutual funds(a)	Mutual funds(a)	167		166		0		0		0		0		167		166		Mutual funds(a)	193		186		—		—		—		—		193		186
Money market mutual funds(b)		861		55		0		0		0		0		861		55
Money market funds(b)																		Money market funds(b)	106		587		—		—		—		—		106		587
Other equity investment(a)	Other equity investment(a)	0		0		8		8		0		0		8		8		Other equity investment(a)	—		—		8		8		—		—		8		8
Contingent purchase consideration asset(c)		0		0		0		0		67		84		67		84
Contingent purchase consideration assets(c)																		Contingent purchase consideration assets(c)	—		—		—		—		5		68		5		68
Total assets measured at fair value	Total assets measured at fair value	$	1,073	$	225	$	8	$	8	$	67	$	84	$	1,148	$	317	Total assets measured at fair value	$	359	$	832	$	8	$	8	$	5	$	68	$	372	$	908
Fiduciary Assets:	Fiduciary Assets:																	Fiduciary Assets:

U.S. Treasury Bills		$	25	$	40	$	0	$	0	$	0	$	0	$	25	$	40
U.S. treasury bills																		U.S. treasury bills	$	75	$	150	$	—	$	—	$	—	$	—	$	75	$	150
Money market funds	Money market funds	176		360		0		0		0		0		176		360		Money market funds	244		173		—		—		—		—		244		173
Total fiduciary assets measured at fair value	Total fiduciary assets measured at fair value	$	201	$	400	$	0	$	0	$	0	$	0	$	201	$	400	Total fiduciary assets measured at fair value	$	319	$	323	$	—	$	—	$	—	$	—	$	319	$	323
Liabilities:	Liabilities:																	Liabilities:
Contingent purchase consideration liability(d)	Contingent purchase consideration liability(d)	$	0	$	0	$	0	$	0	$	230	$	225	$	230	$	225	Contingent purchase consideration liability(d)	$	—	$	—	$	—	$	—	$	303	$	243	$	303	$	243

Total liabilities measured at fair value	Total liabilities measured at fair value	$	0	$	0	$	0	$	0	$	230	$	225	$	230	$	225	Total liabilities measured at fair value	$	—	$	—	$	—	$	—	$	303	$	243	$	303	$	243

(a) Included in other assets in the consolidated balance sheets.

(b) Included in cash and cash equivalents in the consolidated balance sheets.

(c) Included in other receivables ~~at September 30, 2020 and other assets at December 31, 2019~~ in the consolidated balance sheets.

(d) Included in accounts payable and accrued liabilities and other liabilities in the consolidated balance sheets.

The Level 3 assets in the ~~above~~ chart reflect contingent purchase consideration from the sale of ~~businesses during 2019.~~businesses. The change in the ~~asset~~contingent purchase consideration assets from December 31, ~~2019~~2020 is driven primarily ~~due to~~by cash receipts of approximately $90 million. This decrease was partially offset by the ~~net~~ impact of accretion and adjustments to the fair value of the ~~acquisition related asset of approximately $14 million. A 5% increase or decrease in the projections used to estimate the~~ contingent purchase consideration ~~would result in a corresponding increase or decrease of the asset of approximately $6 million.~~assets.

During the ~~nine-month period~~nine months ended September 30, ~~2020,~~2021, there were no assets or liabilities that were transferred between ~~any of the~~ levels.

The following table ~~below~~ sets forth a summary of the changes in fair value of the Company’s Level 3 liabilities for the three and nine month periods ended September 30, ~~2020~~2021 and ~~2019:~~2020:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	(In millions)	2020		2019		2020		2019		(In millions)	2021		2020		2021		2020
Balance at beginning of period	Balance at beginning of period	$	233	$	196	$	225	$	508	Balance at beginning of period	$	340	$	233	$	243	$	225
Net Additions		0		(7)		96		33
Net additions										Net additions	1		—		99		96
Payments	Payments	(23)		(13)		(101)		(58)		Payments	(54)		(23)		(72)		(101)
Revaluation Impact		18		6		8		26
Change in fair value of the FX contract		0		0		0		(325)
Revaluation impact										Revaluation impact	18		18		35		8

Other (a)	Other (a)	2		3		2		1		Other (a)	(2)		2		(2)		2
Balance at September 30,	Balance at September 30,	$	230	$	185	$	230	$	185	Balance at September 30,	$	303	$	230	$	303	$	230

(a) Primarily reflects the impact of foreign exchange.

As set forth in the table above, based on the Company's ongoing assessment of the fair value of contingent consideration, the Company recorded a net increase in the estimated fair value of such liabilities for prior-period

acquisitions of $8 million in the nine-month period ended September 30, 2020. A 5% increase in the projections used to estimate the contingent consideration would increase the liability by approximately $9 million. A 5% decrease would decrease the liability by approximately $21 million.

Long-Term Investments

The Company holds investments in public and private companies as well as certain private equity investments ~~public companies and private companies~~ that are accounted for using the equity method of accounting. The carrying value of these investments was ~~$265~~$328 million and ~~$434~~$280 million at September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

Investments in Public and Private Companies

The Company has ~~other~~ investments in private insurance and consulting companies with a carrying value of ~~$169~~$178 million and ~~$183~~$169 million at September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

~~The Company’s equity~~ These investments ~~in insurance and consulting companies~~ are accounted for using the equity method of accounting, the results of which are included in revenue in the consolidated statements of income and the carrying value of which is included in other assets in the consolidated balance sheets. The Company records its share of income or loss on its equity method investments, some of which are on a one quarter lag basis.

Private Equity Investments

The Company's investments in private equity funds were ~~$96~~$150 million and ~~$107~~$111 million at September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. The carrying values of these private equity investments approximate fair value. The underlying private equity funds follow investment company accounting, where investments within the fund are carried at fair value. The Company records in earnings its proportionate share of the change in fair value of the funds on the investment income (loss) line in the consolidated statements of income. These investments are included in other assets in the consolidated balance sheets. The Company recorded net investment gains of $2$13 million and ~~losses of $6~~$40 million ~~from these investments~~ for the three and nine month periods ended September 30, ~~2020,~~2021, respectively, ~~compared to net investment gains~~and gain of $3$2 million and ~~$10~~loss of $6 million from these investments for the same periods in ~~2019.~~2020.

Other Investments

At September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company held certain equity investments with readily determinable market values of ~~$58~~$74 million and ~~$19~~$72 million, ~~respectively. The Company recorded~~respectively, including an investment ~~losses on these investments of $16 million and $19 million~~ in the ~~three and nine month periods ended~~common stock of Alexander Forbes ("AF") of $55 million at September 30, ~~2020, respectively,~~2021 and ~~investment gains of $4~~$54 million ~~and $10 million for the same periods in 2019.~~at December 31, 2020. The Company also held investments without readily determinable market values of ~~$43 million and $67~~$33 million at both September 30, ~~2020~~2021 and December 31, ~~2019, respectively.~~2020.

~~At December 31, 2019, the~~The Company ~~owned approximately 443~~sold 242 million shares of the common stock of AF ~~a South African company listed on the Johannesburg Stock Exchange,~~during 2020. The investment in AF, which was accounted for ~~under~~using the equity method of ~~accounting. In February 2020,~~accounting prior to the ~~Company sold approximately 49 million~~sale of these shares, of the common stock of AF, and in May 2020, sold an additional 193 million shares to third parties, leaving the Company with an investment of approximately 201 million shares of the common stock of AF at September 30, 2020. Upon completion of the May transaction, the investment in AF is accounted for at fair value, with investment gains and losses recorded as investment income (loss) in the consolidated statement of income. ~~The fair value of AF at September 30, 2020 was $41 million.~~

In March 2019, the Company disposed of its investment in BenefitFocus for total proceeds of approximately $132 million. The Company received $115 million in the first quarter of 2019 and $17 million in April 2019.

~~During the second quarter of 2019, the Company disposed of its investment in Payscale and received approximately $47 million.~~

11. Derivatives

Net Investment Hedge

The Company has investments in various subsidiaries with Euro functional currencies. As a result, the Company is exposed to the risk of fluctuations between the Euro and U.S. dollar exchange rates. The Company designated its €1.1 billion senior note debt instruments ("euro notes") as a net investment hedge (the ~~"Hedge"~~"hedge") of its Euro denominated subsidiaries. The ~~Hedge~~hedge effectiveness is re-assessed each quarter to confirm that the designated equity balance at the beginning of each period continues to equal or exceed 80% of the outstanding balance of the Euro debt instrument and that all the critical terms of the hedging instrument and the hedged net investment continue to match. If the Company concludes that the hedge is highly effective, the change in the debt balance related to foreign exchange fluctuations is recorded in foreign currency translation gains (losses) in the consolidated balance sheet. The Company concluded that the hedge continues to be highly effective as of September 30, ~~2020. During 2020,~~

2021, and the change in the debt balance related to foreign exchange fluctuations was recorded in foreign currency translation gains (losses) in the consolidated balance sheet. The U.S. dollar value of the euro notes ~~increased $60~~decreased $63 million through September 30, 2021 due to the impact of foreign exchange rates, with a corresponding decrease to ~~foreign currency translation gains (losses).~~accumulated other comprehensive loss.

~~JLT Acquisition Related Derivatives~~

On September 20, 2018, the Company entered into the FX Contract to purchase £5.2 billion at a contracted exchange rate, to hedge the risk of appreciation of the GBP-denominated purchase price of JLT, which was settled on April 1, 2019, upon the closing of the JLT Transaction. The FX Contract did not qualify for hedge accounting treatment under applicable accounting guidance, which required the Company to record the change in the fair value of the FX Contract on each reporting date to the statement of income. The Company recorded a gain of $31 million for the nine month period ended September 30, 2019 related to the settlement of the FX contract.

In connection with the JLT Transaction, to hedge the economic risk of changes in future interest rates prior to its issuance of fixed rate debt, in the fourth quarter of 2018 the Company entered into treasury lock contracts related to $2 billion of senior notes issued in January 2019. The contracts were not designated as an accounting hedge. In January 2019, upon issuance of the $5 billion of senior notes, the Company settled the treasury lock derivatives and made a payment to its counter party for $122 million. A charge of $6 million was recorded in the first quarter of 2019 related to the settlement of the Treasury lock derivatives.

In March 2019, the Company issued €1.1 billion of senior notes related to the JLT Transaction. See Note 14 for additional information related to the Euro senior note issuances. In connection with the senior note issuances, the Company entered into a forward exchange contract to hedge the economic risk of changes in foreign exchange rates from the issuance date to settlement date of the Euro senior notes. The Company recorded a charge of $7.3 million in the consolidated statement of income for the period ended September 30, 2019 upon settlement of this contract.

~~JLT Derivatives and Hedging Activity~~

A significant portion of JLT's outstanding senior notes at the time of completion of the JLT Transaction were denominated in U.S. dollars. In order to hedge its exposure against the risk of fluctuations between the British pound and the U.S. dollar, JLT entered into foreign exchange contracts as well as interest rate swaps to protect against the risk of changes in interest rates, which were designated as fair value hedges. In June, 2019, the Company redeemed these U.S. dollar denominated senior notes and settled the related derivative contracts. The offsetting changes in fair value of the debt and the change in fair value of the derivative contracts were recorded in the consolidated statement of income for the nine month period ended September 30, 2019.

JLT also had a number of foreign exchange contracts to hedge the risk of foreign exchange movements between the U.S. dollar and the British pound, related to JLT’s U.S. dollar denominated revenue in the U.K. Prior to the acquisition, these derivative contracts were designated as cash flow hedges. Upon completion of the JLT Transaction, these derivative contracts were not re-designated as cash flow hedges by the Company. The contracts were settled in June 2019. The change in fair value between the acquisition date and the settlement date resulted in a charge of $26 million for the nine month period ended September 30, 2019. The charge is recorded as a change in fair value of acquisition related derivative contracts in the consolidated statement of income.

12. Leases

A lease is defined as a party obtaining the right to use an asset legally owned by another party. The Company determines if an arrangement is a lease at inception. ~~For operating~~Operating leases ~~entered into prior to January 1, 2019,~~are recognized on the balance sheet as Right-of-Use ("ROU") assets and operating lease liabilities ~~are recognized in the balance sheet~~ based on the present value of the remaining future minimum payments over the lease term from the implementation date of the standard, January 1, 2019. The ROU asset was adjusted for unamortized lease incentives and restructuring liabilities that were reported, prior to January 1, 2019, as other liabilities in the consolidated balance sheet. For leases entered into subsequent to January 1, 2019, the operating lease ROU asset and operating lease liabilities are based on the present value of minimum payments over the lease term at commencement date of the lease.

The Company uses discount rates to determine the present value of future lease payments. The Company primarily uses its incremental borrowing rate adjusted to reflect a secured rate, based on the information available for leases, including the lease term and interest rate environment in the country in which the lease exists. The lease terms used to calculate the ROU asset and lease liability may include options to extend or terminate when it is reasonably certain that the Company will exercise that option.

The Company leases office facilities under non-cancelable operating leases with terms generally ranging between 10 and 25 years. The Company utilizes these leased office facilities for use by its employees in countries in which the Company conducts its business. Leases are negotiated with third-parties and, in some instances contain renewal, expansion and termination options. The Company also subleases certain office facilities to third-parties when the Company no longer utilizes the space. None of the Company’s leases restrict the payment of dividends or the incurrence of debt or additional lease obligations, or contain significant purchase options. In addition to the base rental costs, our lease agreements generally provide for rent escalations resulting from increased assessments for real estate taxes and other charges. A portion of our real estate lease portfolio contains base rents subject to annual changes in the Consumer Price Index ("CPI") as well as charges for operating expenses which are reimbursable to the landlord based on actual usage. Changes to the CPI and payments for such reimbursable operating expenses are considered variable and are recognized as variable lease costs in the period in which the obligation for those payments is incurred. Approximately 99% of the Company’s lease obligations are for the use of office space. All of the Company’s material leases are operating leases.

As a practical expedient, the Company ~~has~~ elected an accounting policy not to separate non-lease components from lease components and instead account as a single lease component. The Company ~~has~~ also elected not to recognize ROU assets and lease liabilities for leases that, at the commencement date, are for 12 months or less.

The following chart provides additional information about the Company’s property leases:


		Three Months ended September 30,				Nine Months Ended September 30,							Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	(In millions)	2020		2019		2020			2019			(In millions)	2021		2020		2021		2020
Lease Cost:	Lease Cost:											Lease Cost:
Operating lease cost	Operating lease cost	$	99	$	94	$	288		$	276		Operating lease cost	$	93	$	99	$	282	$	288
Short-term lease cost	Short-term lease cost	1		4		3			7			Short-term lease cost	1		1		4		3
Variable lease cost	Variable lease cost	28		37		92			113			Variable lease cost	38		28		101		92
Sublease income	Sublease income	(5)		(4)		(15)			(12)			Sublease income	(3)		(5)		(16)		(15)
Net lease cost	Net lease cost	$	123	$	131	$	368		$	384		Net lease cost	$	129	$	123	$	371	$	368
Other information:	Other information:											Other information:
Operating cash outflows from operating leases	Operating cash outflows from operating leases					$	306		$	288		Operating cash outflows from operating leases					$	310	$	306
Right of use assets obtained in exchange for new operating lease liabilities	Right of use assets obtained in exchange for new operating lease liabilities					$	162		$	112		Right of use assets obtained in exchange for new operating lease liabilities					$	282	$	162
Weighted-average remaining lease term – real estate	Weighted-average remaining lease term – real estate					8.44 years			8.86 years			Weighted-average remaining lease term – real estate					9.0 years		8.4 years

Weighted-average discount rate – real estate leases	Weighted-average discount rate – real estate leases					3.02		%	3.09		%	Weighted-average discount rate – real estate leases					2.75%		3.02%

2724

Future minimum lease payments for the Company’s operating leases as of September 30, ~~2020~~2021 are as follows:


Payment Dates (In millions)	Payment Dates (In millions)	Real Estate Leases		Payment Dates (In millions)	Real Estate Leases
Remainder of 2020		$	112
2021		390
Remainder of 2021				Remainder of 2021	$	102
2022	2022	363		2022	387
2023	2023	315		2023	340
2024	2024	270		2024	298
2025	2025	242		2025	266
2026				2026	243
Subsequent years	Subsequent years	855		Subsequent years	897
Total future lease payments	Total future lease payments	2,547		Total future lease payments	2,533
Less: Imputed interest	Less: Imputed interest	(310)		Less: Imputed interest	(294)
Total	Total	$	2,237	Total	$	2,239
Current lease liabilities	Current lease liabilities	$	335	Current lease liabilities	$	339
Long-term lease liabilities	Long-term lease liabilities	1,902		Long-term lease liabilities	1,900
Total lease liabilities	Total lease liabilities	$	2,237	Total lease liabilities	$	2,239

Note: Table excludes obligations for leases with original terms of 12 months or less which have not been recognized as a right toof use asset or liability in the consolidated balance sheets.

As of September 30, ~~2020,~~2021, the Company had additional operating real estate leases that had not yet commenced of ~~$16~~$13 million. These operating leases will commence over the next 12 ~~months.~~months.

13. Retirement Benefits

The Company maintains qualified and non-qualified defined benefit pension plans for some of its U.S. and non-U.S. eligible employees. The Company’s policy for funding its tax-qualified defined benefit pension plans is to contribute amounts at least sufficient to meet the funding requirements set forth in accordance with applicable law.

The target asset allocation for the Company's U.S. plans ~~was~~is 64% equities and equity alternatives and 36% fixed income. At September 30, ~~2020~~2021 the actual allocation for the Company's U.S. Plan was ~~63%~~65% equities and equity alternatives and ~~37%~~35% fixed income. The target allocation for the U.K. Plans at September 30, ~~2020 was~~2021 is ~~33%~~27% equities and equity alternatives and ~~67%~~73% fixed income. At September 30, ~~2020,~~2021, the actual allocation for the U.K. Plans was ~~33%~~28% equities and equity alternatives and ~~67%~~72% fixed income. The Company's U.K. Plans comprised approximately 81% of non-U.S. plan assets at December 31, ~~2019.~~2020. The assets of the Company's defined benefit plans are diversified and are managed in accordance with applicable laws and with the goal of maximizing the plans' real return within acceptable risk parameters. The Company generally uses threshold-based portfolio re-balancing to ensure the actual portfolio remains consistent with target asset allocation ranges.

~~JLT Defined Benefit Pension Plans~~

As part of the JLT Transaction, the Company has assumed responsibility for a number of pension plans throughout the world, with $255 million of net pension liabilities as of December 31, 2019 (approximately $1,003 million in liabilities and $748 million of plan assets), the most significant of which is the JLT U.K. Plan. The JLT U.K. Plan has a defined benefit section which was frozen to future accrual in 2006 and a defined contribution section. The assets of the scheme are held in a trustee administered fund separate from the Company.

2825

The components of the net periodic benefit cost for defined benefit ~~and other post-retirement~~ plans are as follows:

Combined U.S. and significant non-U.S. Plans Pension
Benefits Post-retirement
Benefits
For the Three Months Ended September 30,
(In millions) 2020 2019 2020 2019
Service cost $ 10 $ 10 $ 0 $ 0
Interest cost 112 120 1 1
Expected return on plan assets (212) (214) 0 0
Recognized actuarial loss (credit) 40 25 (1) (1)
Net periodic benefit credit $ (50) $ (59) $ 0 $ 0
Combined U.S. and significant non-U.S. Plans Pension
Benefits Post-retirement
Benefits
For the Nine Months Ended September 30,
(In millions) 2020 2019 2020 2019
Service cost $ 27 $ 28 $ 0 $ 0
Interest cost 322 360 2 2
Expected return on plan assets (629) (644) 0 0
Amortization of prior service credit 0 0 (1) (1)
Recognized actuarial loss (credit) 120 77 (1) (1)
Net periodic benefit credit $ (160) $ (179) $ 0 $ 0
Settlement loss 0 4 0 0
Total credit $ (160) $ (175) $ 0 $ 0


Combined U.S. and significant non-U.S. Plans	Pension Benefits
For the Three Months Ended September 30,
(In millions)	2021		2020
Service cost	$	9	$	10
Interest cost	87		112
Expected return on plan assets	(208)		(212)

Recognized actuarial loss	52		40




Total credit	$	(60)	$	(50)

Combined U.S. and significant non-U.S. Plans	Pension Benefits
For the Nine Months Ended September 30,
(In millions)	2021		2020
Service cost	$	29	$	27
Interest cost	258		322
Expected return on plan assets	(627)		(629)

Recognized actuarial loss	155		120
Net periodic benefit credit	$	(185)	$	(160)

Settlement loss	2		—

Total credit	$	(183)	$	(160)



Amounts Recorded in the Consolidated Statement of Income
Combined U.S. and significant non-U.S. Plans	Pension Benefits
For the Three Months Ended September 30,
(In millions)	2021		2020
Compensation and benefits expense	$	9	$	10
Other net benefit credit	(69)		(60)
Total credit	$	(60)	$	(50)


Amounts Recorded in the Consolidated Statement of Income	Amounts Recorded in the Consolidated Statement of Income									Amounts Recorded in the Consolidated Statement of Income
Combined U.S. and significant non-U.S. Plans	Combined U.S. and significant non-U.S. Plans	Pension Benefits				Post-retirement Benefits				Combined U.S. and significant non-U.S. Plans	Pension Benefits
For the Three Months Ended September 30,
For the Nine Months Ended September 30,										For the Nine Months Ended September 30,					Pension Benefits
(In millions)	(In millions)	2020		2019		2020		2019		(In millions)
Compensation and benefits expense (Operating income)		$	10	$	10	$	0	$	0
Other net benefit credits		(60)		(69)		0		0
Compensation and benefits expense										Compensation and benefits expense	$	29	$	27
Other net benefit credit										Other net benefit credit	(212)		(187)
Total credit	Total credit	$	(50)	$	(59)	$	0	$	0	Total credit	$	(183)	$	(160)

Amounts Recorded in the Consolidated Statement of Income
Combined U.S. and significant non-U.S. Plans Pension
Benefits Post-retirement
Benefits
For the Nine Months Ended September 30,
(In millions) 2020 2019 2020 2019
Compensation and benefits expense (Operating income) $ 27 $ 28 $ 0 $ 0
Other net benefit credits (187) (203) 0 0
Total credit $ (160) $ (175) $ 0 $ 0


U.S. Plans only	U.S. Plans only	Pension Benefits				Post-retirement Benefits				U.S. Plans only	Pension Benefits
For the Three Months Ended September 30,	For the Three Months Ended September 30,									For the Three Months Ended September 30,
(In millions)	(In millions)	2020		2019		2020		2019		(In millions)	2021		2020

Interest cost	Interest cost	$	53	$	61	$	1	$	1	Interest cost	$	47	$	53
Expected return on plan assets	Expected return on plan assets	(86)		(86)		0		0		Expected return on plan assets	(82)		(86)

Recognized actuarial loss (credit)		18		11		(1)		(1)
Recognized actuarial loss										Recognized actuarial loss	22		18
Net periodic benefit credit	Net periodic benefit credit	$	(15)	$	(14)	$	0	$	0	Net periodic benefit credit	$	(13)	$	(15)

2926


U.S. Plans only	U.S. Plans only	Pension Benefits				Post-retirement Benefits				U.S. Plans only	Pension Benefits
For the Nine Months Ended September 30,	For the Nine Months Ended September 30,									For the Nine Months Ended September 30,
(In millions)	(In millions)	2020		2019		2020		2019		(In millions)	2021		2020

Interest cost	Interest cost	$	160	$	181	$	1	$	1	Interest cost	$	139	$	160
Expected return on plan assets	Expected return on plan assets	(259)		(257)		0		0		Expected return on plan assets	(245)		(259)

Recognized actuarial loss (credit)		54		33		(1)		(1)
Recognized actuarial loss										Recognized actuarial loss	67		54
Net periodic benefit credit	Net periodic benefit credit	$	(45)	$	(43)	$	0	$	0	Net periodic benefit credit	$	(39)	$	(45)

Significant non-U.S. Plans only Pension
Benefits Post-retirement
Benefits
For the Three Months Ended September 30,
(In millions) 2020 2019 2020 2019
Service cost $ 10 $ 10 $ 0 $ 0
Interest cost 59 59 0 0
Expected return on plan assets (126) (128) 0 0
Recognized actuarial loss 22 14 0 0
Net periodic benefit credit $ (35) $ (45) $ 0 $ 0


Significant non-U.S. Plans only	Significant non-U.S. Plans only	Pension Benefits				Post-retirement Benefits				Significant non-U.S. Plans only	Pension Benefits
For the Nine Months Ended September 30,
For the Three Months Ended September 30,										For the Three Months Ended September 30,					Pension Benefits
(In millions)	(In millions)	2020		2019		2020		2019		(In millions)
Service cost	Service cost	$	27	$	28	$	0	$	0	Service cost	$	9	$	10
Interest cost	Interest cost	162		179		1		1		Interest cost	40		59
Expected return on plan assets	Expected return on plan assets	(370)		(387)		0		0		Expected return on plan assets	(126)		(126)
Amortization of prior service credit		0		0		(1)		(1)

Recognized actuarial loss	Recognized actuarial loss	66		44		0		0		Recognized actuarial loss	30		22
Net periodic benefit credit		$	(115)	$	(136)	$	0	$	0

Settlement loss		0		4		0		0

Total credit	Total credit	$	(115)	$	(132)	$	0	$	0	Total credit	$	(47)	$	(35)


Significant non-U.S. Plans only	Pension Benefits
For the Nine Months Ended September 30,
(In millions)	2021		2020
Service cost	$	29	$	27
Interest cost	119		162
Expected return on plan assets	(382)		(370)

Recognized actuarial loss	88		66
Net periodic benefit credit	$	(146)	$	(115)

Settlement loss	2		—
Total credit	$	(144)	$	(115)

The weighted average actuarial assumptions utilized to calculate the net periodic benefit costs for the U.S. and significant non-U.S. defined benefit plans are as follows:


Combined U.S. and significant non-U.S. Plans	Combined U.S. and significant non-U.S. Plans	Pension Benefits				Post-retirement Benefits					Combined U.S. and significant non-U.S. Plans	Pension Benefits

September 30,	September 30,	2020		2019				2020			2019		September 30,		2021			2020
Weighted average assumptions:	Weighted average assumptions:										Weighted average assumptions:
Expected return on plan assets	Expected return on plan assets	5.31	%	5.74	%	0			0		Expected return on plan assets	4.72		%		5.31	%
Discount rate	Discount rate	2.57	%	3.48	%	2.72	%		3.65	%	Discount rate	1.92		%		2.57	%
Rate of compensation increase	Rate of compensation increase	1.76	%	1.74	%	0			0		Rate of compensation increase	1.85		%		1.76	%

The Company made approximately ~~$81~~$90 million of contributions to its U.S. and non-U.S. defined benefit pension plans for the nine months ended September 30, ~~2020.~~2021. The Company expects to contribute ~~approximately $63~~approximately $39 million to its U.S. and non-U.S. defined benefit pension plans during the remainder of ~~2020.~~2021.

Defined Contribution Plans

The Company maintains certain defined contribution plans ("DC Plans") for its employees, the most significant being in the U.S. and the U.K. The cost of the U.S. DC Plans was ~~$110~~$115 million and ~~$106~~$110 million for the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively. The cost of the U.K. DC Plans wwasas $106 million and $94 ~~million and $74~~ million for the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

3027

14. Debt

The Company’s outstanding debt is as follows:


(In millions)	(In millions)	September 30, 2020		December 31, 2019		(In millions)	September 30, 2021		December 31, 2020
Short-term:	Short-term:					Short-term:

Current portion of long-term debt	Current portion of long-term debt	$	1,216	$	1,215	Current portion of long-term debt	$	516	$	517
		1,216		1,215			516		517
Long-term:	Long-term:					Long-term:

Senior notes – 2.35% due 2020		0		500
Senior notes – 3.50% due 2020		700		698

Senior notes – 4.80% due 2021	Senior notes – 4.80% due 2021	500		499		Senior notes – 4.80% due 2021	—		500
Senior notes - Floating rate due 2021		299		298

Senior notes – 2.75% due 2022	Senior notes – 2.75% due 2022	499		498		Senior notes – 2.75% due 2022	500		499
Senior notes – 3.30% due 2023	Senior notes – 3.30% due 2023	349		349		Senior notes – 3.30% due 2023	349		349
Senior notes – 4.05% due 2023	Senior notes – 4.05% due 2023	249		249		Senior notes – 4.05% due 2023	249		249
Senior notes – 3.50% due 2024	Senior notes – 3.50% due 2024	598		597		Senior notes – 3.50% due 2024	598		598
Senior notes – 3.875% due 2024	Senior notes – 3.875% due 2024	995		994		Senior notes – 3.875% due 2024	996		995
Senior notes – 3.50% due 2025	Senior notes – 3.50% due 2025	497		497		Senior notes – 3.50% due 2025	498		498
Senior notes – 1.349% due 2026	Senior notes – 1.349% due 2026	641		609		Senior notes – 1.349% due 2026	647		677
Senior notes – 3.75% due 2026	Senior notes – 3.75% due 2026	597		597		Senior notes – 3.75% due 2026	598		597
Senior notes – 4.375% due 2029	Senior notes – 4.375% due 2029	1,499		1,499		Senior notes – 4.375% due 2029	1,499		1,499
Senior notes – 1.979% due 2030	Senior notes – 1.979% due 2030	635		607		Senior notes – 1.979% due 2030	632		664
Senior notes – 2.250% due 2030	Senior notes – 2.250% due 2030	737		0		Senior notes – 2.250% due 2030	738		737
Senior notes – 5.875% due 2033	Senior notes – 5.875% due 2033	298		298		Senior notes – 5.875% due 2033	298		298
Senior notes – 4.75% due 2039	Senior notes – 4.75% due 2039	495		494		Senior notes – 4.75% due 2039	495		495
Senior notes – 4.35% due 2047	Senior notes – 4.35% due 2047	493		492		Senior notes – 4.35% due 2047	493		493
Senior notes – 4.20% due 2048	Senior notes – 4.20% due 2048	592		592		Senior notes – 4.20% due 2048	592		592
Senior notes – 4.90% due 2049	Senior notes – 4.90% due 2049	1,237		1,237		Senior notes – 4.90% due 2049	1,238		1,237
Mortgage – 5.70% due 2035	Mortgage – 5.70% due 2035	334		345		Mortgage – 5.70% due 2035	320		331
Term loan facility - two year		500		0

Other	Other	4		7		Other	4		5
		12,748		11,956			10,744		11,313
Less current portion	Less current portion	1,216		1,215		Less current portion	516		517
		$	11,532	$	10,741		$	10,228	$	10,796

The senior notes in the table ~~above~~ are registered by the Company with the Securities and Exchange Commission and are not guaranteed.

~~The~~On April 9, 2021, the Company ~~has established a~~increased its short-term ~~debt~~commercial paper financing program ~~of up~~ to $2.0 billion from $1.5 ~~billion through the issuance of commercial paper. The proceeds from the issuance of commercial paper are used for general corporate purposes.~~billion. The Company had 0no commercial paper outstanding at September 30, ~~2020.~~2021.

Credit Facilities

~~The~~On April 2, 2021, the Company entered into an amended and ~~certain of its foreign subsidiaries have a~~restated multi-currency unsecured $2.8 billion five-year ~~unsecured~~ revolving credit facility ~~of $1.8 billion.~~("New Facility"). The interest rate on ~~this facility~~the New Facility is based on LIBOR plus a fixed margin which varies with the ~~Company's~~Company’s credit ratings. ~~This facility~~The New Facility expires in ~~October 2023~~April 2026 and requires the Company to maintain certain coverage and leverage ratios which are tested quarterly. The ~~facility~~New Facility includes a provision for determining a LIBOR successor rate in the event LIBOR reference rates are no longer available. In such case, the rate would be determined using an alternate reference rate that has been broadly accepted by the syndicated loan market in the United States in lieu of LIBOR (the “LIBOR successor rate”). If no LIBOR successor rate has been determined, the rate will be based on the higher of the rate announced publicly by Citibank, New York, NY, as its base rate or the fed funds rate plus a fixed margin. The Company borrowed $1 billion under this facility in the first quarter of 2020, which

~~was repaid in full during the second quarter of 2020. There were 0 borrowings outstanding under this facility at September 30, 2020.~~

In January 2020, the Company entered into two new term loan facilities: a $500 million one-year facility and a $500 million two-year facility. The interest rate on these facilities is based on LIBOR plus a fixed margin which varies with the Company's credit ratings. The facilities require the Company to maintain coverage ratios and leverage ratios consistent with the revolving credit facility discussed above. The facilities include a provisionprovisions for determining a LIBOR successor rate in the event LIBOR reference rates are no longer available or in certain other circumstances which ~~is expected~~are determined to ~~occur by~~make using an alternative rate desirable. As of September 30, 2021, the ~~end of 2021.These facilities are expected to expire~~Company had no borrowings under this facility.

In connection with the New Facility, the Company terminated its previous multi-currency unsecured $1.8 billion five-year revolving credit facility and its unsecured $1 billion 364-day unsecured revolving credit facility ("364-day Facility").

In January 2020, the Company closed on ~~or around~~a $500 million one-year and $500 million two-year term loan facilities. In the ~~time that LIBOR is expected to be replaced by a successor rate. During the third~~first quarter of 2020 the Company borrowed $1 billion against these facilities, which were subsequently repaid during the third and fourth quarters of 2020. These two facilities were terminated as of December 31, 2020 after repayment of the initial draw down.

Additional credit facilities, guarantees and letters of credit are maintained with various banks, primarily related to operations located outside the United States, aggregating $512 million at September 30, 2021 and $573 million at December 31, 2020. There were no outstanding borrowings under these facilities at September 30, 2021 and December 31, 2020.

Senior Notes

On April 15, 2021, the Company repaid $500 million of ~~borrowings on its one-year facility. The Company had $500 million of borrowings outstanding under its two-year facility and 0 borrowings outstanding under its one-year facility at September 30, 2020.~~

In April 2020, the Company entered into a new 364 day $1 billion unsecured revolving credit facility with a term out option after one year. The facility has similar coverage and leverage ratios as the facility discussed above. As of the date of this report the Company had 0 borrowings under this facility.

~~Senior Notes~~senior notes maturing in July 2021.

In May 2020, the Company issued $750 million of ~~2.250% Senior Notes~~senior notes due 2030. ~~The Company used the net proceeds to reduce outstanding short term borrowings.~~

In March 2020, the Company repaid $500 million of maturing senior notes.

~~In September 2019, the Company repaid $300 million of maturing senior notes.~~

In connection with the closing of the JLT Transaction, the Company assumed approximately $1 billion of historical JLT indebtedness. In April and June of 2019, the Company repaid approximately $450 million~~and $553 million, respectively, representing all of JLT's debt it acquired upon the closing of the JLT Transaction. The Company incurred debt extinguishment costs of~~ ~~$32 million~~ ~~due to the debt repayments.~~

In March 2019, the Company issued €550 million of 1.349% Senior Notes due 2026 and €550 million of 1.979% Senior Notes due 2030. In addition, the Company issued an additional $250 million of 4.375% Senior Notes due 2029, in March 2019. These notes constitute a further issuance of the 4.375% Senior Notes due 2029, of which $1.25 billion aggregate principal amount was issued in January 2019 (see below). After giving effect to the issuance of the notes, the Company has $1.5 billion aggregate principal amount of 4.375% Senior Notes due 2029. The Company used part of the net proceeds from these offerings, along with the $5 billion of Senior Notes issued in January 2019 (discussed above) primarily to fund the acquisition of JLT, including the payment of related fees and expenses, and to repay certain JLT indebtedness, as well as for general corporate purposes.

In January 2019, the Company issued $700 million of 3.50% Senior Notes due 2020, $1 billion of 3.875% Senior Notes due 2024, $1.25 billion of 4.375% Senior Notes due 2029, $500 million of 4.75% Senior Notes due 2039, $1.25 billion of 4.90% Senior Notes due 2049 and $300 million of Floating Rate Senior Notes due 2021. The floating rate notes are based on LIBOR plus a fixed margin. These notes are due prior to the date that LIBOR is expected to be replaced by a successor rate, which is expected to occur in 2021.

Fair Value of Short-term and Long-term Debt

The following table reflects the carrying values and estimated fair value of the Company’s short-term and long-term ~~debt is provided below.~~debt. Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts ~~shown below~~ are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company’s intent or need to dispose of the financial instrument.


		September 30, 2020				December 31, 2019					September 30, 2021				December 31, 2020
(In millions)	(In millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		(In millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value

Short-term debt	Short-term debt	$	1,216	$	1,234	$	1,215	$	1,229	Short-term debt	$	516	$	519	$	517	$	523
Long-term debt	Long-term debt	$	11,532	$	13,480	$	10,741	$	11,953	Long-term debt	$	10,228	$	11,878	$	10,796	$	12,858

The fair value of the ~~Company’s~~Company's short-term debt consists primarily of ~~borrowings from the term loan and revolving credit facilities and~~ term debt maturing within the next year and its fair value approximates its carrying value. The estimated fair value ~~of a primary portion~~ of the Company's long-term debt is based on discounted future cash flows using current interest rates available for debt with similar terms and remaining maturities. Short-term and long-term debt would be classified as Level 2 in the fair value hierarchy.

15. Restructuring Costs

~~JLT~~Jardine Lloyd Thompson Group plc ("JLT") Related Integration and Restructuring

The Company is ~~currently integrating~~in the final stages of its integration of JLT, which ~~involves combining~~ the ~~business practices~~Company acquired in April 2019. The costs incurred in connection with the integration and ~~co-locating colleagues in most geographies, rationalizing~~restructuring of the combined businesses, primarily related to severance, real estate ~~leases around the world, realizing of synergies~~rationalization and ~~migrating legacy JLT systems onto the Company's information~~ technology, ~~environment and security protocols. The Company is also incurring cost for~~ consulting fees related to the management of the integration ~~management~~ processes and legal fees related to ~~rationalizing~~the rationalization of legal entity ~~structures~~structures.

Since the acquisition of JLT, the Company has incurred JLT integration and restructuring costs of $647 million through September 30, 2021. This reflects $19 million and $61 million of costs incurred for the three and nine months ended September 30, 2021, respectively, compared to ~~reduce costs, mitigate risks~~$44 million and ~~improve operational transparency.~~$181 million, respectively, for the same periods in the prior year.

Costs ~~will be~~ recognized are based on applicable accounting guidance which includes accounting for disposal or exit activities, guidance related to impairment of long lived assets (for right of use assets related to real estate leases), as well as other costs resulting from accelerated depreciation or amortization of leasehold improvements and other property and equipment. Based on its current estimates, the Company expects to incur costs of approximately $700 million in connection with the integration and restructuring of the combined businesses, primarily related to severance, real estate rationalization, information technology rationalization, consulting fees related to the management of the integration processes and legal fees related to the rationalization of legal entity structures. ~~The Company incurred $335 million of costs in 2019 and $181 million in the first nine months of 2020 and expects the remaining costs to be incurred during the fourth quarter of 2020 and in 2021.~~ These integration and restructuring plans may change during implementation, which may change our current cost and related savings estimates, as the Company continues to refine its detailed plans for each business and location.

In connection with the JLT integration and restructuring, ~~in the first nine months of 2020~~ the Company incurred costs of ~~$181~~$19 million and $61 million: ~~$125~~$11 million and $38 million in RIS ~~$31~~and $9 million and $21 million in Consulting for the three and ~~$25 million in Corporate.~~nine months ended September 30, 2021, respectively. The severance and related costs were included in compensation and benefits and the other costs were included in other operating expenses in the consolidated ~~statement~~statements of income.

After further evaluation of our sublease assumptions, the Company recorded a ROU asset impairment charge of $9 million for the nine month period ended September 30, 2020 to reflect the current market environment.

Details of the JLT integration and restructuring activity from January 1, ~~2019~~2020 through September 30, ~~2020, is~~2021, are as follows:


(In millions)	(In millions)	Severance		Real Estate Related Costs (a)		Information Technology (a)		Consulting and Other Outside Services (b)		Total		(In millions)	Severance		Real Estate Related Costs (a)		Information Technology (a)		Consulting and Other Outside Services (b)		Total
Liability at 1/1/19		$	0	$	0	$	0	$	0	$	0
2019 Charges		154		38		45		98		335
Liability at 1/1/20												Liability at 1/1/20	$	42	$	5	$	—	$	—	$	47
2020 charges												2020 charges	43		69		62		77		251
Cash payments	Cash payments	(112)		(14)		(45)		(94)		(265)		Cash payments	(69)		(25)		(55)		(77)		(226)
Non-cash charges	Non-cash charges	0		(19)		0		(4)		(23)		Non-cash charges	—		(42)		(5)		—		(47)

Liability at 12/31/19		$	42	$	5	$	0	$	0	$	47
2020 Charges		38		42		45		56		181
Liability at 12/31/20												Liability at 12/31/20	$	16	$	7	$	2	$	—	$	25
2021 charges												2021 charges	9		19		15		18		61
Cash payments	Cash payments	(70)		(15)		(40)		(44)		(169)		Cash payments	(15)		(9)		(16)		(18)		(58)
Non-cash charges	Non-cash charges	0		(26)		(5)		0		(31)		Non-cash charges	—		(13)		—		—		(13)
Liability at 9/30/2020		$	10	$	6	$	0	$	12	$	28
Liability at 9/30/21												Liability at 9/30/21	$	10	$	4	$	1	$	—	$	15

(a) Includes ROU asset impairments, data center contract termination costs and temporary infrastructure leasing costs.

(b) Includes consulting fees related to the management of the integration processes and legal fees related to the rationalization of legal entity structures.

Other Restructuring

~~During 2018 and 2019, Marsh initiated programs to simplify its organization structure and realign and rebrand certain of its businesses.~~ The ~~Company incurred severance and consulting costs of $2 million for the nine month period ended September 30, 2020, related to these initiatives.~~

During the fourth quarter of 2018, Mercer initiated a program to restructure its business to further optimize the way Mercer operates, setting up the Company for a more fluid and nimble structure and operating model for the future. The Company incurred restructuring severance and consulting costs of $17 million for the nine month period ended September 30, 2020 related to this initiative.

~~In addition to the charges discussed above, the~~ Company incurred costs of ~~$24~~$12 million ~~at Corporate in 2020 that reflects cost to modernize~~and $35 million for the three and nine months ended September 30, 2021 which reflect costs associated with the Company's global information technology ~~systems~~ and ~~security protocols, consulting costs related to the restructure of the Global~~ HR ~~function~~functions, and adjustments to restructuring liabilities for future rent under non-cancellable leases.

After further evaluation of our sublease assumptions, the Company recorded a ROU asset impairment charge of $3 million for the nine month period ended September 30, 2020 to reflect the current market environment.

The following details other restructuring liabilities for actions initiated prior to ~~2020:~~2021:


(In millions)	(In millions)	Liability at 1/1/19		Amounts Accrued		Cash Paid		Other		Liability at 12/31/19		Amounts Accrued		Cash Paid		Other		Liability at 9/30/2020		(In millions)	Liability at 1/1/20		Amounts Accrued		Cash Paid		Non-Cash/Other		Liability at 12/31/20		Amounts Accrued		Cash Paid		Non-Cash/Other		Liability at 9/30/21
Severance	Severance	$	73	$	73	$	(91)	$	(4)	$	51	$	15	$	(51)	$	0	$	15	Severance	$	51	$	39	$	(54)	$	—	$	36	$	13	$	(35)	$	—	$	14
Future rent under non-cancelable leases and other costs	Future rent under non-cancelable leases and other costs	39		39		(21)		(6)		51		28		(34)		(2)		$	43	Future rent under non-cancelable leases and other costs	51		50		(46)		(10)		45		22		(31)		(4)		32
Total	Total	$	112	$	112	$	(112)	$	(10)	$	102	$	43	$	(85)	$	(2)	$	58	Total	$	102	$	89	$	(100)	$	(10)	$	81	$	35	$	(66)	$	(4)	$	46

The expenses associated with ~~the above~~these initiatives are included in compensation and benefits and other operating expenses in the consolidated statements of income. The liabilities associated with these initiatives are classified on the consolidated balance sheets as accounts payable and accrued liabilities, other liabilities or accrued compensation and employee benefits, depending on the nature of the items.

16. Common Stock

~~There~~ ~~were 0 repurchases of the Company's common stock during the first nine months of 2020. The Company does not expect to repurchase shares for the remainder of 2020.~~ In November 2019, the Board of Directors of the Company authorized the Company to repurchase up to $2.5 billion in shares of the Company's common stock, which superseded any prior authorizations. During the first nine months of 2021, the Company repurchased 5.3 million shares of its common stock for $734 million. As of September 30, ~~2020,~~2021, the Company remained authorized to repurchase up to approximately ~~$2.4~~$1.7 billion in shares of its common stock. There is no time limit on the authorization. During the first nine months of ~~2019~~2020, there were no repurchases of the Company's common stock.

The Company ~~repurchased~~issued approximately 3.1 million ~~shares of its common stock for consideration of $300 million.~~

~~The Company issued approximately~~and 3.4 ~~million and 4.2~~ million shares related to stock compensation and employee stock purchase plans during the first nine months of 2021 and 2020, ~~and 2019,~~ respectively.

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17. Claims, Lawsuits and Other Contingencies

~~Acquisition~~Nature of ~~Jardine Lloyd Thompson Group plc~~

On April 1, 2019, the Company completed its previously announced acquisition of all of the outstanding shares of JLT. See Note 8 to the consolidated financial statements for additional information. Upon the consummation of the acquisition of JLT, the Company assumed the legal liabilities and became responsible for JLT’s litigation and regulatory exposures as of April 1, 2019.

~~Litigation Matters~~Contingencies

The Company and its subsidiaries are subject to a significant number of claims, lawsuits and proceedings in the ~~ordinary~~ course of our business. Such claims and lawsuits consist principally of alleged errors and omissions in connection with the performance of professional services, including the placement of insurance, the provision of actuarial ~~investment advisory, and investment management~~ services for corporate and public sector clients, the provision of investment advice and investment management services to pension plans, the provision of advice relating to pension buy-out transactions and the provision of consulting services relating to the drafting and interpretation of trust deeds and other documentation governing pension plans. These claims ~~may~~often seek damages, including punitive and treble damages, in amounts that could be significant. In establishing liabilities for errors and omissions claims in accordance with FASB guidance on Contingencies - Loss Contingencies, the Company uses case level reviews by inside and outside counsel, and internal actuarial analysis by Oliver Wyman, ~~Group,~~ a subsidiary of the Company, and other methods to estimate potential losses. A liability is established when a loss is both probable and reasonably estimable. The liability is reviewed quarterly and adjusted as developments warrant. In many cases, the Company has not recorded a liability, other than for legal fees to defend the claim, because we are unable, at the present time, to make a determination that a loss is both probable and reasonably estimable. To the extent that expected losses exceed our deductible in any policy year, the Company also records an asset for the amount that we expect to recover under any available third-party insurance programs. The Company has varying levels of third-party insurance coverage, with policy limits and coverage terms varying significantly by policy year.

~~Governmental Inquiries and Enforcement Matters~~

Our activities are regulated under the laws of the United States and its various states, the United Kingdom, the European Union and its member states, and the many other jurisdictions in which the Company operates. The Company also receives subpoenas in the ordinary course of business and, from time to time, receives requests for information in connection with governmental investigations.

Current Matters

Risk and Insurance Services Segment

•In April 2017, the Financial Conduct Authority in the United Kingdom (the "FCA") commenced a civil competition investigation into the aviation insurance and reinsurance sector. In connection with that investigation, the FCA carried out an on-site inspection at the London offices of Marsh Limited, our Marsh and Guy Carpenter operating subsidiary in the United Kingdom, and JLT Specialty Ltd., JLT's U.K. operating subsidiary. The FCA indicated that it had reasonable grounds for suspecting that Marsh Limited, JLT Specialty Ltd. and other participants in the market had been sharing competitively sensitive information within the aviation insurance and reinsurance broking sector.

In October 2017, the Company received a notice that the Directorate-General for Competition of the European Commission had commenced a civil investigation of a number of insurance brokers, including both Marsh and JLT, regarding "the exchange of commercially sensitive information between competitors in relation to aviation and aerospace insurance and reinsurance broking products and services in the European Economic Area ("EEA"), as well as possible coordination between competitors." In light of the action taken by the European Commission, the FCA informed Marsh Limited and JLT Specialty Ltd. that it had discontinued its investigation under U.K. competition law. In May 2018, the FCA advised that it would not be taking any further action with Marsh Limited or JLT Specialty Ltd. in connection with this matter.

In January 2019, the Company received a notice that the Administrative Council for Economic Defense anti-trust agency in Brazil had commenced an administrative proceeding against a number of insurance brokers, including both Marsh and JLT, and insurers “to investigate an alleged sharing of sensitive commercial and competitive confidential information" in the aviation insurance and reinsurance sector.

•In 2017, JLT identified payments to a third-party introducer that had been directed to unapproved bank accounts. These payments related to reinsurance placements made on behalf of an Ecuadorian state-owned ~~insurer.~~insurer between 2014 and 2017. In early 2018, JLT voluntarily reported this matter to law enforcement authorities. In February and March 2020, money laundering charges were filed in the United States against a former employee of JLT, the principals of the third-party introducer and a former official of the state-owned insurer. ~~At least three~~

~~of these~~These individuals, including the former JLT employee, have since pleaded guilty to criminal charges. We are cooperating with all ongoing investigations related to this matter.

~~At this time, we are unable~~•From 2014, Marsh Ltd. was engaged by Greensill Capital (UK) Limited as its insurance broker. Marsh Ltd. placed a number of trade credit insurance policies for Greensill. On March 1, 2021, Greensill filed an action against certain of its trade credit insurers in Australia seeking a mandatory injunction compelling these insurers to ~~predict~~renew coverage under expiring policies. Later that day, the ~~likely timing, outcome~~Australian court denied Greensill’s application. Since then, a number of Greensill entities have filed for, or ~~ultimate impact of~~been subject to, insolvency proceedings, and several litigations and investigations have been commenced in the ~~foregoing investigations or any related matters. Adverse determinations in one or more of these matters could have a material impact on~~U.K., Australia, Germany, Switzerland and the ~~Company's consolidated results of operations, financial condition or cash flows in a future period.~~U.S.

Consulting Segment

•In 2014, the FCA conducted ~~a thematic~~an industry-wide review of the suitability of financial advice provided to individuals by a number of companies, including JLT, relating to enhanced transfer value ("ETV") defined benefit pension transfers. In January 2015, the FCA notified JLT that it was commissioning a Skilled Person review of ~~JLT’s~~ ETV pension transfer ~~advice.~~advice given by JLT and a business acquired by JLT in 2012. Following the Skilled Person review which took place between 2015 and 2018, JLT engaged a compliance consulting firm to conduct an analysis of approximately 14,000 individual ~~cases~~files to assess the suitability of the advice provided and, where appropriate, the amount of redress to be paid. In February 2019, prior to the completion of its acquisition by the ~~acquisition,~~Company, JLT recorded a gross liability of ~~approximately~~ £59 million (or ~~approximately~~ $77 million) ~~based primarily upon~~. This preliminary estimate by JLT, which reflected the ~~results of~~projected redress amounts contained in the Skilled Person report, ~~together with the expected costs of the ETV file review. This estimate~~ was based on a review of a limited number of files. Thereafter, the ~~total files.~~FCA expanded the scope

of the review. As of December 31, 2020, the updated redress liability, including the projected costs of completing the review, increased to £155 million (or $210 million) resulting from the expansion in the scope of the review, and the significant progress made in completing the individual suitability reviews. Payments of redress and expenses during the first three quarters of 2021, together with a reduction of the actuarial estimates of future redress payments, reduced the recorded liability to £25 million (or $34 million) as of September 30, ~~2020, that estimated liability increased~~2021. We expect to ~~approximately£62 million (or approximately $79 million) to reflect~~finalize the ~~increased compliance costs of the ongoing review. As the~~suitability review and redress calculations ~~are completed for~~and to make substantially all redress payments by the ~~outstanding files,~~end of the ~~ultimate~~fourth quarter of 2021. This gross liability ~~may increase significantly. We expect this gross liability~~has been, and we anticipate will continue to be, partially offset by a contractual indemnity obligation and insurance recoveries from ~~JLT’s insurers and indemnification claims.~~third-party E&O insurers.

At this time, we are unable to predict the likely timing, outcome or ultimate impact of the foregoing matters. Adverse determinations in one or more of these matters could have a material impact on the Company's consolidated results of operations, financial condition or cash flows in a future period.

Other Contingencies-Guarantees

In connection with its acquisition of U.K.-based Sedgwick Group in 1998, the Company acquired several insurance underwriting businesses that were already in run-off, including River Thames Insurance Company Limited ("River Thames"), which the Company sold in 2001. Sedgwick guaranteed payment of claims on certain policies underwritten through the Institute of London Underwriters (the "ILU") by River Thames. The policies covered by this guarantee ~~were~~are partly reinsured ~~up to £40 million~~ by a related party of River Thames. Payment of claims under the reinsurance agreement is collateralized by ~~segregated assets held in a trust. As of September 30, 2020,~~funds withheld by River Thames from the ~~reinsurance coverage exceeded the best estimate of the projected liability of the policies covered by the guarantee.~~reinsurer. To the extent River Thames or the reinsurer is unable to meet its obligations under those policies, a claimant may seek to recover from the Company under the guarantee.

From 1980 to 1983, the Company owned indirectly the English & American Insurance Company ("E&A"), which was a member of the ILU. The ILU required the Company to guarantee a portion of E&A's obligations. After E&A became insolvent in 1993, the ILU agreed to discharge the guarantee in exchange for the Company's agreement to post an evergreen letter of credit that is available to pay claims by policyholders on certain E&A policies issued through the ILU and incepting between July 3, 1980 and October 6, 1983. Certain claims have been paid under the letter of credit and the Company anticipates that additional claimants may seek to recover against the letter of credit.

* * * *

The pending proceedings ~~described~~described above and other matters not explicitly described in this Note 17 on Claims, Lawsuits and Other Contingencies may expose the Company or its subsidiaries to liability for significant monetary damages, fines, penalties or other forms of relief. Where a loss is both probable and reasonably estimable, the Company establishes liabilities in accordance with FASB guidance on Contingencies - Loss Contingencies. Except as described above, the Company is not able at this time to provide a reasonable estimate of the range of possible loss attributable to these matters or the impact they may have on the Company's consolidated results of operations, financial position or cash flows. This is primarily because these matters are still developing and involve complex issues subject to inherent uncertainty. Adverse determinations in one or more of these matters could have a material impact on the Company's consolidated results of operations, financial condition or cash flows in a future period.

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18. Segment Information

The Company is organized based on the types of services provided. Under this structure, the Company’s segments are:

•Risk and Insurance Services, comprising insurance services (Marsh) and reinsurance services (Guy Carpenter); and

•Consulting, comprising Mercer and Oliver Wyman Group.

The accounting policies of the segments are the same as those used for the consolidated financial statements described in Note 1 to the Company’s ~~2019~~2020 Form 10-K. Segment performance is evaluated based on segment operating income, which includes directly related expenses, and charges or credits related to integration and restructuring but not the Company’s corporate-level expenses. Revenues are attributed to geographic areas on the basis of where the services are performed.

Prior to being acquired by the Company, JLT operated in 3 segments: Specialty, Reinsurance and Employee Benefits. JLT operated in 41 countries, with significant revenue in the United Kingdom, Pacific, Asia and the United States. As of April 1, 2019, the historical JLT businesses were combined into MMC operations as follows: JLT Specialty is included by geography within Marsh, JLT Reinsurance is included in Guy Carpenter and the majority of JLT's Employee Benefits business was included in Mercer Health and Wealth.

Selected information about the Company’s operating segments for the three and ~~nine-month~~nine month periods ended September 30, ~~2020~~2021 and ~~2019~~2020 are as follows:


		Three Months Ended September 30,					Nine Months Ended September 30,						Three Months Ended September 30,					Nine Months Ended September 30,
(In millions)	(In millions)	Revenue			Operating Income (Loss)		Revenue			Operating Income (Loss)		(In millions)	Revenue			Operating Income (Loss)		Revenue			Operating Income (Loss)
2021–												2021–
Risk and Insurance Services												Risk and Insurance Services	$	2,670	(a)	$	403	$	9,036	(c)	$	2,413
Consulting												Consulting	1,925		(b)	404		5,690		(d)	1,109
Total Operating Segments												Total Operating Segments	4,595			807		14,726			3,522
Corporate/Eliminations												Corporate/Eliminations	(12)			(67)		(43)			(196)
Total Consolidated												Total Consolidated	$	4,583		$	740	$	14,683		$	3,326
2020–	2020–											2020–
Risk and Insurance Services	Risk and Insurance Services	$	2,291	(a)	$	333	$	7,805	(c)	$	1,883	Risk and Insurance Services	$	2,291	(a)	$	333	$	7,805	(c)	$	1,883
Consulting	Consulting	1,696		(b)	278		5,074		(d)	815		Consulting	1,696		(b)	278		5,074		(d)	815
Total Operating Segments	Total Operating Segments	3,987			611		12,879			2,698		Total Operating Segments	3,987			611		12,879			2,698
Corporate/Eliminations	Corporate/Eliminations	(19)			(71)		(71)			(203)		Corporate/Eliminations	(19)			(71)		(71)			(203)
Total Consolidated	Total Consolidated	$	3,968		$	540	$	12,808		$	2,495	Total Consolidated	$	3,968		$	540	$	12,808		$	2,495
2019–
Risk and Insurance Services		$	2,206	(a)	$	218	$	7,203	(c)	$	1,468
Consulting		1,785		(b)	317		5,258		(d)	874
Total Operating Segments		3,991			535		12,461			2,342
Corporate/Eliminations		(23)			(68)		(73)			(257)
Total Consolidated		$	3,968		$	467	$	12,388		$	2,085

(a) Includes ~~inter-segment revenue of $3 million in 2019,~~ interest income on fiduciary funds of $4 million and $8 million in 2021 and ~~$31~~2020, respectively, and equity method income of $8 million in ~~2020 and 2019, respectively,~~2021 and equity method loss of $6 million in ~~2020and equity method income of $10 million in 2019.~~2020.

(b) Includes inter-segment revenue of ~~$19~~$11 million and ~~$20~~$19 million in 2021 and 2020, ~~and 2019, respectively, interest income on fiduciary funds of less than $1 million in both 2020 and 2019.~~respectively.

(c) Includes inter-segment revenue of $5 million for both 2021 and ~~$7 million~~in 2020, ~~and 2019, respectively,~~ interest income on fiduciary funds of $12 million and $40 million in 2021 and ~~$80 million in~~ 2020, ~~and 2019,~~ respectively, and equity method income of $25 million and $7 million in 2021 and ~~$16 million in~~ 2020, ~~and 2019,~~ respectively.

(d) Includes inter-segment revenue of $38 million and $66 million in ~~both~~2021 and 2020, ~~and 2019, interest income on fiduciary funds of $1 million and $2 million in 2020 and 2019,~~ respectively, and equity method income of $4 million ~~and $10 million~~ in 2020 and ~~2019, respectively.~~none in 2021.

3733

Details of operating segment revenue for the three and ~~nine-month~~nine month periods ended September 30, ~~2020~~2021 and ~~2019~~2020 are as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	(In millions)	2020		2019		2020		2019		(In millions)	2021		2020		2021		2020
Risk and Insurance Services	Risk and Insurance Services									Risk and Insurance Services
Marsh	Marsh	$	2,015	$	1,923	$	6,259	$	5,850	Marsh	$	2,355	$	2,015	$	7,336	$	6,259
Guy Carpenter	Guy Carpenter	276		283		1,546		1,353		Guy Carpenter	315		276		1,700		1,546
Total Risk and Insurance Services	Total Risk and Insurance Services	2,291		2,206		7,805		7,203		Total Risk and Insurance Services	2,670		2,291		9,036		7,805
Consulting	Consulting									Consulting
Mercer	Mercer	1,216		1,280		3,616		3,695		Mercer	1,315		1,216		3,877		3,616
Oliver Wyman Group	Oliver Wyman Group	480		505		1,458		1,563		Oliver Wyman Group	610		480		1,813		1,458
Total Consulting	Total Consulting	1,696		1,785		5,074		5,258		Total Consulting	1,925		1,696		5,690		5,074
Total Operating Segments	Total Operating Segments	3,987		3,991		12,879		12,461		Total Operating Segments	4,595		3,987		14,726		12,879
Corporate/Eliminations		(19)		(23)		(71)		(73)
Corporate/Eliminations										Corporate/Eliminations	(12)		(19)		(43)		(71)
Total	Total	$	3,968	$	3,968	$	12,808	$	12,388	Total	$	4,583	$	3,968	$	14,683	$	12,808

19. New Accounting Guidance

New Accounting Pronouncements Adopted Effective January 1, ~~2020:~~

In August 2018, the FASB issued new guidance that amends required fair value measurement disclosures. The guidance adds new requirements, eliminates some current disclosures and modifies other required disclosures. The new disclosure requirements, along with modifications made to disclosures as a result of the change in requirements for narrative descriptions of measurement uncertainty, must be applied on a prospective basis. The effects of all other amendments included in the guidance must be applied retrospectively for all periods presented. The adoption of this guidance impacted disclosures only and did not have an impact on the Company's financial position or results of operations.

In January 2017, the FASB issued new guidance to simplify the test for goodwill impairment. The new guidance eliminates the second step in the current two-step goodwill impairment process, under which a goodwill impairment loss is measured by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill for that reporting unit. The new guidance requires a one-step impairment test, in which the goodwill impairment charge is based on the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The guidance should be applied on a prospective basis with the nature of and reason for the change in accounting principle disclosed upon transition. The adoption of this standard did not have an impact on the Company's financial position or results of operations.

In June 2016, the FASB issued new guidance on the impairment of financial instruments. The new guidance adds a CECL impairment model that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of lifetime expected credit losses, which the FASB believes will result in more timely recognition of such losses. The new standard is also intended to reduce the complexity of U.S. GAAP by decreasing the number of credit impairment models that entities use to account for debt instruments. Further, the new standard makes targeted changes to the impairment model for available-for-sale debt securities. The adoption of this standard did not have a material impact on the Company's financial position or results of operations.

~~New Accounting Pronouncements Effective January 1, 2019:~~

~~The following new accounting standard was adopted using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of January 1, 2019:~~

~~Leases~~

In February 2016, the FASB issued new guidance intended to improve financial reporting for leases. Under the new guidance, a lessee is required to recognize assets and liabilities for leases. Consistent with legacy GAAP, therecognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee will depend on the classification of the lease as financing or operating. However, unlike legacy GAAP, which requires that only capital leases are recognized on the balance sheet, the new guidance requires that both operating and

financing leases be recognized on the balance sheet. The Company adopted this new standard effective January 1, 2019, using a modified retrospective method, applying the new guidance as of the beginning of the year of adoption, with a cumulative effect of initially applying the guidance recognized as an adjustment to retained earnings at January 1, 2019. Therefore, prior period information has not been restated. The Company has elected the package of practical expedients, which among other things, allows historical lease classifications to be carried forward. The Company did not elect the hindsight practical expedient in determining lease term and impairment of an entity's ROU assets. On January 1, 2019, the Company recognized a lease liability of~~$1.9 billion and ROU asset of $1.7 billion~~, related to real estate operating leases. The ROU asset also reflected reclassification adjustments primarily from other liabilities related to existing deferred rent, unamortized lease incentives and restructuring liabilities of $0.2 billion upon adoption. There was no cumulative-effect adjustment required to be booked to retained earnings upon transition. The adoption of this standard did not have a material impact on our income statement as compared to prior periods.

~~The following new accounting standards were adopted prospectively as of January 1, 2019:~~

~~Derivatives and Hedging~~

In August 2017, the FASB issued new guidance intended to refine and expand hedge accounting for both financial and commodity risks. The guidance creates more transparency around how economic results are presented in both the financial statements and the footnotes, as well as making targeted improvements to simplify the application of hedge accounting guidance. The Company adopted this guidance effective January 1, 2019. The adoption of this standard did not have an impact on the Company's financial position or results of operations.

~~Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income~~

In February 2018, the FASB issued new guidance that allowed an entity to reclassify the stranded tax effects resulting from the Tax Cuts and Job Act (the "TCJA") from accumulated other comprehensive income ("AOCI") to retained earnings. The guidance is effective for the period beginning January 1, 2019. The Company elected not to reclassify the stranded income tax effects of the TCJA from AOCI to retained earnings. The adoption of this standard had no impact on the Company's financial position or results of operations. The Company’s accounting policy related to releasing income tax effects from AOCI follows the portfolio approach.

~~New Accounting Pronouncements Not Yet Adopted~~2021:

In January 2020, the FASB issued guidance that addresses accounting for the transition into and out of the equity method and measuring certain purchased options and forward ~~contract~~contracts to acquire investments. The standard takes effect for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. ~~Early adoption is permitted.~~ The adoption of this standard isdid not ~~expected to~~ have a material impact on the Company’s financial position or its results of operations.

In December 2019, the FASB issued guidance related to the accounting for income taxes. The standard removes specific exceptions in the current rules and eliminates the need for an organization to analyze whether the following apply in a given period: (a) exception to the incremental approach for intraperiod tax allocation; (b) exceptions to accounting for basis differences when there are ownership changes in foreign investments and (c) exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. The standard also is designed to improve financial statement preparers’ application of income tax-related guidance and simplify GAAP for (a) franchise taxes that are partially based on income; (b) transactions with a government that result in a step-up in the tax basis of goodwill; (c) separate financial statements of legal entities that are not subject to tax and (d) enacted changes in tax laws in interim periods. The standard takes effect for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The ~~Company is currently evaluating the impact~~adoption of this standard ~~will~~did not have a material impact on ~~its~~the Company’s financial position ~~and~~or its results of operations.

New Accounting Pronouncements Adopted Effective January 1, 2020:

In August 2018, the FASB issued new guidance that amends ~~disclosures related to Defined Benefit Plans.~~required fair value measurement disclosures. The guidance ~~removes disclosures that no longer are considered cost-beneficial, clarifies the specific~~adds new requirements, ~~of certain~~eliminates some current disclosures and ~~adds~~modifies other required disclosures. The new disclosure requirements, ~~identified~~along with modifications made to disclosures as ~~relevant. The guidance~~a result of the change in requirements for narrative descriptions of measurement uncertainty, must be applied on a ~~retrospective~~prospective basis. The effects of all other amendments included in the guidance ~~is effective~~must be applied retrospectively for ~~fiscal years ending after December 15, 2020. Early~~all periods presented. The adoption ~~is permitted. Adoption~~ of this guidance ~~will impact~~impacted disclosures only and ~~will~~did not have an impact on the Company's financial position or results of operations.

In January 2017, the FASB issued new guidance to simplify the test for goodwill impairment. The new guidance eliminates the second step in the current two-step goodwill impairment process, under which a goodwill impairment loss is measured by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill for that reporting unit. The new guidance requires a one-step impairment test, in which the goodwill impairment charge is based on the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The guidance should be applied on a prospective basis with the nature of and reason

for the change in accounting principle disclosed upon transition. The adoption of this standard did not have an impact on the Company's financial position or results of operations.

In June 2016, the FASB issued new guidance on the impairment of financial instruments. The new guidance adds an allowance for credit losses ("CECL") impairment model that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of lifetime expected credit losses, which the FASB believes will result in more timely recognition of such losses. The new standard is also intended to reduce the complexity of U.S. GAAP by decreasing the number of credit impairment models that entities use to account for debt instruments. Further, the new standard makes targeted changes to the impairment model for available-for-sale debt securities. The adoption of this standard did not have a material impact on the Company’s financial position or results of operations.

3935

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

General

Marsh & McLennan Companies, Inc. and its consolidated subsidiaries (the "Company" or "Marsh McLennan") is a global professional services firm offering clients advice ~~and solutions~~ in the areas of risk, strategy and people. ~~Its businesses include:~~The Company’s 81,000 colleagues advise clients in 130 countries. With annual revenue over $19 billion, the Company helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses. Marsh ~~the~~advises individual and commercial clients of all sizes on insurance ~~broker, intermediary~~broking and innovative risk ~~advisor;~~management solutions. Guy Carpenter ~~the~~develops advanced risk, reinsurance and ~~reinsurance specialist;~~capital strategies that help clients grow profitably and pursue emerging opportunities. Mercer ~~the provider of HR and Investment related financial~~delivers advice and ~~services;~~technology-driven solutions that help organizations redefine the world of work, reshape retirement and investment outcomes, and unlock health and well being for a changing workforce. Oliver Wyman ~~the management,~~Group serves as a critical strategic, economic and brand ~~consultancy. With 76,000 colleagues worldwide~~advisor to private sector and ~~annual revenue of $17 billion, the Company provides analysis, advice and transactional capabilities to clients in more than 130 countries.~~governmental clients.

The Company ~~operates~~conducts business through two segments:

•Risk and Insurance Services includes risk management activities (risk advice, risk transfer and risk control and mitigation solutions) as well as insurance and reinsurance broking and services. The Company conducts business in this segment through Marsh and Guy Carpenter.

•Consulting includes health, wealth ~~health~~ and career consulting services and products, and specialized management, economic and brand consulting services. The Company conducts business in this segment through Mercer and Oliver ~~Wyman.~~Wyman Group.

A reconciliation of segment operating income to total operating income is included in Note 18 to the consolidated financial statements included in Part I Item 1 in this report. The accounting policies used for each segment are the same as those used for the consolidated financial statements.

For information on the ~~third quarter~~three and nine ~~month periods~~months ended September 30, ~~2019~~2020 results and similar comparisons, see "Item 7.2. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-Q for the ~~quarterly and year-to-date periods~~quarter ended September 30, ~~2019.~~2020.

Business Update Related To COVID-19

Although the vast majority of ~~the Company’s~~ colleagues ~~have continued working~~continue to work in a remote ~~work~~ environment, ~~with virtually minimal disruption~~the Company has provided guidelines on a gradual and phased return to the ~~Company as a whole~~office depending on the level of virus containment and ~~its ability to serve clients.~~local health and safety regulations in each geography. The safety and well-being of our colleagues ~~continues to be our first priority.~~

~~The~~the economic outlook and the ultimate extent of ~~the~~ COVID-19 impact to the Company will depend on ~~numerous evolving factors and~~ future developments that it is ~~not able~~unable to ~~predict.~~ predict, including new “waves” of infection from emerging variants of the virus, potential renewed restrictions and mandates by various governments or agencies, and the distribution and uptake of vaccines.

Factors that could adversely affect the Company’s financial statements related to the financial and operational impact of COVID-19 are outlined in “Item 1A - Risk Factors” in the Company’s Form ~~10-Q~~10-K for the ~~quarter~~year ended ~~March~~December 31, 2020.

~~Acquisition of JLT~~

On April 1, 2019, the Company completed its acquisition (the "Transaction") of all of the outstanding shares of Jardine Lloyd Thompson Group plc ("JLT"), a public company organized under the laws of England and Wales. Under the terms of the Transaction, JLT shareholders received £19.15 in cash for each JLT share, which values JLT’s existing issued and to be issued share capital at approximately £4.3 billion (or approximately $5.6 billion based on an exchange rate of U.S. $1.31:£1).

~~JLT's results of operations for the period January 1, 2019 through March 31, 2019 are not included in the Company’s results of operation for 2019.~~

By virtue of the acquisition of JLT, the Company assumed the legal liabilities and became responsible for JLT’s litigation and regulatory exposures as of April 1, 2019. Please see the "Risk Factors" section of our most recently filed Annual Report on Form 10-K for risks associated with the acquisition.

The Company’s results for the three and nine month periods ended September 30, 2020 were impacted by JLT related acquisition, restructuring and integration costs as well as legacy MMC restructuring programs as discussed in Note 15 to the consolidated financial statements.

Acquisitions and dispositions impacting the Risk and Insurance Services and Consulting segments are discussed in Note 8 to the consolidated financial statements.

This Management's Discussion & Analysis ("MD&A") contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. See "Information Concerning Forward-Looking Statements" at the outset of this report.

~~Consolidated Results of Operations~~

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions, except per share figures) 2020 2019 2020 2019
Revenue $ 3,968 $ 3,968 $ 12,808 $ 12,388
Expense:
Compensation and Benefits 2,495 2,437 7,479 7,256
Other Operating Expenses 933 1,064 2,834 3,047
Operating Expenses 3,428 3,501 10,313 10,303
Operating Income 540 467 2,495 2,085
Income Before Income Taxes 459 414 2,253 1,908
Net Income Before Non-Controlling Interests 320 306 1,667 1,377
Net Income Attributable to the Company $ 316 $ 303 $ 1,642 $ 1,351
Net Income Per Share Attributable to the Company:
Basic $ 0.62 $ 0.60 $ 3.25 $ 2.67
Diluted $ 0.62 $ 0.59 $ 3.21 $ 2.64
Average Number of Shares Outstanding:
Basic 507 506 506 506
Diluted 512 511 511 511
Shares Outstanding at September 30, 507 505 507 505

4136

Consolidated Results of Operations


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions, except per share data)	2021		2020		2021		2020
Revenue	$	4,583	$	3,968	$	14,683	$	12,808
Expense:
Compensation and benefits	2,853		2,495		8,520		7,479
Other operating expenses	990		933		2,837		2,834
Operating expenses	3,843		3,428		11,357		10,313
Operating income	740		540		3,326		2,495






Income before income taxes	716		459		3,247		2,253
Net income before non-controlling interests	542		320		2,367		1,667



Net income attributable to the Company	$	537	$	316	$	2,340	$	1,642
Net Income per share attributable to the Company:
Basic	$	1.06	$	0.62	$	4.61	$	3.25
Diluted	$	1.05	$	0.62	$	4.56	$	3.21



Average number of shares outstanding:
Basic	506		507		508		506
Diluted	513		512		513		511
Shares outstanding at September 30,	505		507		505		507

Risk and Insurance Services

The following reflects the results of operations for the Risk and Insurance Services segment:


For the Three and Nine Months Ended September 30,	Three Months				Nine Months
(In millions)	2021		2020		2021		2020
Revenue	$	2,670	$	2,291	$	9,036	$	7,805
Compensation and benefits	1,634		1,400		4,876		4,234
Other operating expenses	633		558		1,747		1,688
Expense	2,267		1,958		6,623		5,922
Operating income	$	403	$	333	$	2,413	$	1,883
Operating income margin	15.1%		14.5%		26.7%		24.1%

Consulting

The following reflects the results of operations for the Consulting segment:


For the Three and Nine Months Ended September 30,	Three Months				Nine Months
(In millions)	2021		2020		2021		2020
Revenue	$	1,925	$	1,696	$	5,690	$	5,074
Compensation and benefits	1,103		980		3,287		2,911
Other operating expenses	418		438		1,294		1,348
Expense	1,521		1,418		4,581		4,259
Operating income	$	404	$	278	$	1,109	$	815
Operating income margin	21.0%		16.4%		19.5%		16.1%

Consolidated operating income increased $200 million, or 37% to $740 million for the three months ended September 30, 2021 compared to $540 million for the three months ended September 30, 2020, reflecting a 16% increase in revenue and 12% increase in expense. The revenue growth was driven by increases in the Risk and Insurance Services and Consulting segments of 17% and 13%, respectively. There continues to be high demand for our advice and services as the U.S. and global economies continue to rebound from the impact of the pandemic. The increase in expense is primarily related to higher incentive compensation and increase in base salaries for additional headcount.

Consolidated operating income increased $831 million, or 33% to $3.3 billion for the nine months ended September 30, 2021 compared to $2.5 billion for the nine months ended September 30, 2020, reflecting a 15% increase in revenue and 10% increase in expense. The revenue growth was driven by increases in the Risk and Insurance Services and Consulting segments of 16% and 12%, respectively. The increase in revenue and expense for the nine months ended September 30, 2021 is due to the same factors as previously discussed for the third quarter. The Company also incurred lower Jardine Lloyd Thompson ("JLT") integration and restructuring costs in 2021 compared to 2020.

Diluted earnings per share increased 69% to $1.05 for the three months ended September 30, 2021 compared to $0.62 for the three months ended September 30, 2020 and 42% to $4.56 for the nine months ended September 30, 2021 compared to $3.21 for the nine months ended September 30, 2020. The increase for the three and nine months ended September 30, 2021 is a result of higher operating income, lower interest expense and higher investment gains in 2021 compared to 2020. The nine months ended September 30, 2021 also included a net charge of approximately $100 million related to the remeasurement of deferred tax assets and liabilities due to the enactment of a tax rate increase from 19% to 25% in the U.K. in the second quarter of 2021.

The Company’s results of operations and earnings per share for the three and nine ~~month periods~~months ended September 30, ~~2020~~2021 and ~~2019~~2020 include costs related to JLT integration and restructuring activities, and other ~~MMC~~ restructuring activities as discussed in more detail in Note 15 of the consolidated financial statements. ~~These~~

The following chart provides a summary of costs that are reflected as part of net operating ~~income. In addition, in 2019 the Company incurred other costs related to the financing of the JLT Transaction and hedging certain economic exposures. These costs are summarized below:~~income:

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2020 2019 2020 2019
Restructuring costs, excluding JLT $ 23 $ 12 $ 43 $ 56
JLT integration and restructuring costs 44 77 181 192
JLT acquisition related costs 15 21 41 133
Impact on operating income 82 110 265 381
Change in fair value of acquisition related derivative contracts — — — 8
Early extinguishment of JLT debt — — — 32
JLT related interest income - pre-acquisition — — — (25)
JLT related interest expense - pre-acquisition — — — 53
Impact on income before taxes $ 82 $ 110 $ 265 $ 449

Operating income in the third quarter of 2020 increased 15% to $540 million. The increase reflects a decrease in expense of 2%, while revenue was flat as compared to the same period last year. The decrease in expense reflects a decrease in JLT integration and restructuring and acquisition-related costs and savings realized from the completion of integration efforts to date. The decrease also reflects lower travel and entertainment, meeting costs and outside services resulting from the Company’s restrictions on travel and cost containment measures taken in light of COVID-19 partly offset by higher base salaries and incentive compensation.

Income before income taxes increased to $459 million in the third quarter of 2020, compared with $414 million in the third quarter of 2019. The increase reflects higher operating income discussed immediately above, partially offset by lower investment income.

Diluted earnings per share increased from $0.59 in the third quarter of 2019 to $0.62 in 2020. This increase is a result of the factors discussed above offset by a higher effective tax rate in the third quarter of 2020 compared to 2019.

~~Operating income for the nine months ended September 30, 2020 increased 20%, to $2.5 billion as compared to $2.1 billion in 2019. This increase is a result of the factors discussed above.~~

Income before income taxes for the nine months ended September 30, 2020 increased to $2.3 billion compared with $1.9 billion in the prior year. The increase in operating income noted above was partially offset by lower investment income and interest income.

Diluted earnings per share increased to $3.21 for the nine month period ended September 30, 2020 from $2.64 in the prior year, primarily due to the factors discussed above as well as a lower effective tax rate.


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Restructuring costs, excluding JLT	$	12	$	23	$	35	$	43
JLT integration and restructuring costs	19		44		61		181
JLT acquisition related costs	11		15		35		41
JLT legacy E&O provision	(63)		—		(63)		—
Legal claims and other	22		—		29		—
Net (gain) loss on sale of businesses	—		—		(49)		2
Impact on operating income	$	1	$	82	$	48	$	267

JLT Integration and Restructuring Costs

The Company is ~~currently integrating JLT, which is discussed~~ in ~~more detail in Note 15 to~~ the ~~consolidated financial statements, and will incur~~final stages of its integration of JLT. The costs incurred in connection with the integration and restructuring of the combined businesses are primarily related to severance, real estate rationalization and technology, consulting fees related to the management of the integration processes and legal fees related to the rationalization of legal entity structures. ~~Based on current estimates,~~Since the acquisition of JLT, the Company ~~expects to incur pre-tax charges~~has incurred JLT integration and restructuring costs of ~~$700~~$647 million through September 30, 2021. This reflects $61 million of ~~which approximately $625 million will be cash charges. The Company~~costs incurred ~~$335 million in 2019 and $181 million in~~during the first nine months of ~~2020 and~~2021 compared to $181 million for the same period in the prior year. The Company expects to incur the remaining $77 million of costs substantially in 2021, primarily related to real estate and technology, of which approximately $69 million will be ~~incurred during~~cash expenditures. Through September 30, 2021, the ~~fourth quarter of 2020 and~~ ~~in 2021. The~~ Company ~~realized cost~~has exceeded the initial estimated savings of ~~approximately $339 million through September 30, 2020, and expects to exceed~~ $350 million and has realized at least $425 million of ~~run rate saving. T~~he Company incurred cash charges of approximately $265 million during 2019 and $169 million in 2020, and expects most of the remaining cash expenditures to occur during the fourth quarter of 2020 and in 2021. Given the current environment, these integration and restructuring plans continue to evolve, which when finalized, may change our current cost and related savings estimates, as the Company continues to refine its detailed plans for each business and location.

annualized savings.

JLT Acquisition Related Costs

JLT acquisition related costs ~~include~~reflect retention costs ~~directly~~ related to ~~completing~~ the ~~Transaction, such~~acquisition of JLT.

JLT Legacy E&O Provision

In the third quarter of 2021, the Company recorded a $36 million reduction in the liability for a legacy JLT Errors and Omissions ("E&O") related to the suitability of advice provided to individuals for defined benefit pension transfers in the UK, as ~~retention~~well as $27 million of recoveries under indemnities and insurance. The reduction in liability primarily reflects lower redress payments than previously estimated, partly offset by higher costs ~~investment banking fees,~~to review and calculate redress. See Note 17 ("Claims, Lawsuits and Other Contingencies") to the consolidated financial statements in this report for additional detail.

Legal claims and other

The Company recorded settlement charges and legal ~~fees and stamp duty tax. It also includes the~~costs related to strategic recruiting.

Net (gain) loss on ~~disposal~~sale of ~~JLT's aerospace~~business

During the first nine months of 2021, the Company sold certain businesses in the U.S. and the U.K. and recognized a net gain of approximately $50 million, primarily related to the commercial networks business in the ~~second quarter of 2019.~~

~~Consolidated Revenue~~U.K. that provided broking and ~~Expense~~back-office solutions for small independent brokers.

Revenue ~~- Components of Change~~

The Company conducts business in ~~more than~~ 130 countries. As a result, foreign exchange rate movements may impact period-to-period comparisons of revenue. Similarly, certain other items such as ~~the revenue impact of~~ acquisitions and dispositions, including transfers among businesses, may impact period-to-period comparisons of revenue. Underlying revenue measures the change in revenue from one period to the next by isolating these impacts.

The calculation of underlying revenue growth for the nine-month period ended September 30, 2020, is calculated as if MMC and JLT were a combined company as of January 1, 2019, but excludes the impact of currency and other acquisitions, dispositions, and transfers among businesses. Combined prior year revenue information for MMC and JLT for the nine-month period ended September 30, 2019 is presented below. The unaudited 2019 JLT revenue amounts in "2019 including JLT" reflect historical JLT revenue information following IFRS, adjusted to conform with U.S. GAAP and MMC’s specific accounting policies, primarily related to development of constraints and subsequent release of those constraints related to the reinsurance business. The decrease in revenue related to the JLT aerospace business, which was sold in June 2019, is reflected in the acquisitions/dispositions column. All other acquisitions/dispositions activity is included in the acquisitions/dispositions column. Underlying expense growth is calculated in a similar manner.

~~The~~ impact of foreign currency exchange fluctuations, acquisitions and dispositions, including transfers among businesses, on the ~~Company's~~Company’s operating revenues by segment are as follows:

Three Months Ended
September 30, %
Change
GAAP
Revenue Components of Revenue Change*
Currency
Impact Acquisitions/
Dispositions/ Other Impact Underlying
Revenue
(In millions) 2020 2019
Risk and Insurance Services
Marsh $ 2,009 $ 1,902 6 % — 3 % 3 %
Guy Carpenter 274 273 — — 1 % —
Subtotal 2,283 2,175 5 % — 2 % 3 %
Fiduciary Interest Income 8 31
Total Risk and Insurance Services 2,291 2,206 4 % — 2 % 2 %
Consulting
Mercer 1,216 1,280 (5) % 1 % (2) % (3) %
Oliver Wyman Group 480 505 (5) % 1 % — (6) %
Total Consulting 1,696 1,785 (5) % 1 % (2) % (4) %
Corporate/Eliminations (19) (23)
Total Revenue $ 3,968 $ 3,968 — — 1 % (1) %

4339

Three Months Ended
September 30, %
Change
GAAP
Revenue Components of Revenue Change*
Currency
Impact Acquisitions/
Dispositions/ Other Impact Underlying
Revenue
(In millions) 2020 2019
Marsh:
EMEA $ 536 $ 536 — 1 % (1) % —
Asia Pacific 254 242 5 % 1 % 1 % 4 %
Latin America 93 110 (15) % (12) % (5) % 2 %
Total International 883 888 — (1) % (1) % 2 %
U.S./Canada 1,126 1,014 11 % — 6 % 5 %
Total Marsh $ 2,009 $ 1,902 6 % — 3 % 3 %
Mercer:
Wealth 566 592 (4) % 2 % (3) % (3) %
Health 430 441 (3) % — (3) % —
Career 220 247 (11) % — — (11) %
Total Mercer $ 1,216 $ 1,280 (5) % 1 % (2) % (3) %


	Three Months Ended September 30,				% Change GAAP Revenue		Components of Revenue Change*
							Currency Impact		Acquisitions/ Dispositions/ Other Impact		Underlying Revenue
(In millions, except percentage data)	2021		2020
Risk and Insurance Services
Marsh	$	2,352	$	2,009	17	%	2	%	3	%	13	%
Guy Carpenter	314		274		15	%	—		—		15	%
Subtotal	2,666		2,283		17	%	1	%	2	%	13	%
Fiduciary interest income	4		8
Total Risk and Insurance Services	2,670		2,291		17	%	1	%	2	%	13	%
Consulting
Mercer	1,315		1,216		8	%	2	%	(1)	%	7	%
Oliver Wyman Group	610		480		27	%	1	%	—		25	%
Total Consulting	1,925		1,696		13	%	2	%	—		12	%
Corporate Eliminations	(12)		(19)
Total Revenue	$	4,583	$	3,968	16	%	2	%	1	%	13	%

Nine Months Ended
September 30, % Change GAAP Revenue 2019 Including JLT % Change Including JLT in 2019 Components of Revenue Change Including JLT*
Currency
Impact Acquisitions/
Dispositions/ Other Impact Underlying
Revenue
(In millions) 2020 2019
Risk and Insurance Services
Marsh $ 6,231 $ 5,795 8 % $ 6,027 3 % (1) % 2 % 3 %
Guy Carpenter 1,534 1,328 15 % 1,446 6 % — — 6 %
Subtotal 7,765 7,123 9 % 7,473 4 % (1) % 1 % 4 %
Fiduciary Interest Income 40 80 85
Total Risk and Insurance Services 7,805 7,203 8 % 7,558 3 % (1) % 1 % 3 %
Consulting
Mercer 3,616 3,695 (2) % 3,769 (4) % (1) % (2) % (1) %
Oliver Wyman 1,458 1,563 (7) % 1,563 (7) % — — (6) %
Total Consulting 5,074 5,258 (4) % 5,332 (5) % (1) % (2) % (2) %
Corporate/Eliminations (71) (73) (73)
Total Revenue $ 12,808 $ 12,388 3 % $ 12,817 — (1) % — 1 %


		Nine Months Ended September 30,				% Change GAAP Revenue		2019 Including JLT		% Change Including JLT in 2019		Components of Revenue Change Including JLT*							Three Months Ended September 30,				% Change GAAP Revenue		Components of Revenue Change*
												Currency Impact		Acquisitions/ Dispositions/ Other Impact		Underlying Revenue									Currency Impact		Acquisitions/ Dispositions/ Other Impact		Underlying Revenue
(In millions)		2020		2019
(In millions, except percentage data)																		(In millions, except percentage data)	2021		2020		% Change GAAP Revenue		Currency Impact		Acquisitions/ Dispositions/ Other Impact		Underlying Revenue
Marsh:	Marsh:																	Marsh:
EMEA	EMEA	$	1,887	$	1,821	4	%	$	1,928	(2)	%	(1)	%	(1)	%	1	%	EMEA	$	600	$	536			4	%	—		8	%
Asia Pacific	Asia Pacific	790		698		13	%	764		3	%	(1)	%	—		4	%	Asia Pacific	281		254		10	%	2	%	—		9	%
Latin America	Latin America	283		304		(7)	%	326		(13)	%	(12)	%	(4)	%	3	%	Latin America	105		93		13	%	1	%	—		12	%
Total International	Total International	2,960		2,823		5	%	3,018		(2)	%	(2)	%	(1)	%	2	%	Total International	986		883		12	%	3	%	—		9	%
U.S./Canada	U.S./Canada	3,271		2,972		10	%	3,009		9	%	—		5	%	4	%	U.S./Canada	1,366		1,126		21	%	—		4	%	16	%
Total Marsh	Total Marsh	$	6,231	$	5,795	8	%	$	6,027	3	%	(1)	%	2	%	3	%	Total Marsh	$	2,352	$	2,009	17	%	2	%	3	%	13	%
Mercer:	Mercer:																	Mercer:

Wealth	Wealth	1,719		1,748		(2)	%	1,803		(5)	%	(1)	%	(3)	%	(1)	%	Wealth	$	613	$	566	9	%	3	%	(1)	%	6	%
Health	Health	1,348		1,341		1	%	1,360		(1)	%	(1)	%	(3)	%	3	%	Health	449		430		4	%	1	%	(1)	%	4	%
Career	Career	549		606		(9)	%	606		(9)	%	(1)	%	—		(9)	%	Career	253		220		15	%	1	%	—		13	%
Total Mercer	Total Mercer	$	3,616	$	3,695	(2)	%	$	3,769	(4)	%	(1)	%	(2)	%	(1)	%	Total Mercer	$	1,315	$	1,216	8	%	2	%	(1)	%	7	%


Underlying revenue measures the change in revenue using consistent currency exchange rates, excluding the impact of certain items that affect comparability such as: acquisitions, dispositions, transfers among businesses, and changes in estimate methodology.

*			Components of revenue change may not add due to rounding.

~~Revenue~~


	Nine Months Ended September 30,				% Change GAAP Revenue				Components of Revenue Change*
							Currency Impact	Acquisitions/ Dispositions/ Other Impact	Underlying Revenue
(In millions, except percentage data)	2021		2020
Risk and Insurance Services
Marsh	$	7,327	$	6,231	18	%			3	%	3	%	12	%
Guy Carpenter	1,697		1,534		11	%			1	%	—		10	%
Subtotal	9,024		7,765		16	%			3	%	2	%	11	%
Fiduciary interest income	12		40
Total Risk and Insurance Services	9,036		7,805		16	%			3	%	2	%	11	%
Consulting
Mercer	3,877		3,616		7	%			4	%	(1)	%	4	%
Oliver Wyman Group	1,813		1,458		24	%			3	%	—		21	%
Total Consulting	5,690		5,074		12	%			4	%	(1)	%	9	%
Corporate Eliminations	(43)		(71)
Total Revenue	$	14,683	$	12,808	15	%			3	%	1	%	10	%


	Nine Months Ended September 30,				% Change GAAP Revenue				Components of Revenue Change*
							Currency Impact	Acquisitions/ Dispositions/ Other Impact	Underlying Revenue
(In millions, except percentage data)	2021		2020
Marsh:
EMEA	$	2,233	$	1,887	18	%			6	%	2	%	10	%
Asia Pacific	902		790		14	%			6	%	—		9	%
Latin America	298		283		5	%			(1)	%	—		6	%
Total International	3,433		2,960		16	%			5	%	1	%	9	%
U.S./Canada	3,894		3,271		19	%			1	%	5	%	14	%
Total Marsh	$	7,327	$	6,231	18	%			3	%	3	%	12	%
Mercer:


Wealth	$	1,861	$	1,719	8	%			6	%	(1)	%	4	%
Health	1,398		1,348		4	%			2	%	(1)	%	3	%
Career	618		549		13	%			3	%	—		10	%
Total Mercer	$	3,877	$	3,616	7	%			4	%	(1)	%	4	%



*			Components of revenue change may not add due to rounding.

Consolidated revenue increased $615 million, or 16% to $4.6 billion for the ~~third quarter of 2020 was~~three months ended September 30, 2021 compared to $4.0 billion for the ~~same as last year. This reflects a decrease of 1%~~three months ended September 30, 2020. Consolidated revenue increased 13% on an underlying basis, ~~offset by an increase~~2% from the impact of foreign currency translation and 1% from acquisitions. On an underlying basis, revenue increased 13% and 12% for the three months ended September 30, 2021 in Risk and Insurance Services and Consulting segments, respectively.

Consolidated revenue increased $1.9 billion, or 15% to $14.7 billion for the nine months ended September 30, 2021 compared to $12.8 billion for the nine months ended September 30, 2020. This reflects increases of 10% on an underlying basis, 3% from the impact of foreign currency translation and 1% from acquisitions. On an underlying basis, revenue increased 11% and 9% for the nine months ended September 30, 2021 in Risk and Insurance Services and Consulting segments, respectively.

Underlying revenue growth in the Risk and Insurance and Consulting segments for the three and nine months ended September 30, 2021 was driven by the high demand for our advice and services as the U.S. and global economies continue to rebound from the impact of the pandemic.

Risk and Insurance Services

Revenue in the Risk and Insurance Services segment increased $379 million, or 17% to $2.7 billion for the three months ended September 30, 2021compared to $2.3 billion for the three months ended September 30, 2020. This reflects increases of 13% on an underlying basis, 1% from the impact of foreign currency translation and 2% from acquisitions.

Revenue in the Risk and Insurance Services segment increased $1.2 billion, or 16% to $9.0 billion for the nine months ended September 30, 2021 compared to $7.8 billion for the nine months ended September 30, 2020. This reflects increases of 11% in underlying revenue, 3% from the impact of foreign currency translation and 2% from acquisitions. The increase in underlying revenue in the Risk and Insurance Services segment for the three and nine months ended September 30, 2021, was primarily due to strong growth in new business, solid retention, and benefits from pricing in the marketplace.

At Marsh, revenue increased $343 million, or 17% to $2.4 billion for the third quarter of ~~2020 was $2.3~~2021compared to $2.0 billion for the third quarter of 2020. This reflects an increase in underlying revenue of 4%13%, a 2% increase from the ~~same quarter~~impact of foreign exchange translation, and a 3% increase from acquisitions. For Marsh, in U.S./Canada, underlying revenue rose 16%. International operations produced underlying revenue growth of 9%, reflecting growth of 9% in Asia Pacific, 8% in EMEA and 12% in Latin America.

At Marsh, revenue increased $1.1 billion, or 18% to $7.3 billion for the ~~prior year.~~nine months ended September 30, 2021 compared to $6.2 billion for the nine months ended September 30, 2020. This reflects an increase in underlying revenue of 12%, a 3% increase from the impact of foreign exchange translation, and a 3% increase from acquisitions. In U.S./Canada, underlying revenue rose 14%. International operations produced underlying revenue growth of 9%, reflecting growth of 9% in Asia Pacific, 10% in EMEA and 6% in Latin America.

At Guy Carpenter, revenue increased $40 million, or 15% to $314 million for the three months ended September 30, 2021, compared to $274 million for the three months ended September 30, 2020, on both a reported and underlying basis.

At Guy Carpenter, revenue increased $163 million, or 11% to $1.7 billion for the nine months ended September 30, 2021 compared to $1.5 billion for the nine months ended September 30, 2020.

Consulting

Consulting revenue increased $229 million, or 13% to $1.9 billion for the three months ended September 30, 2021 compared to $1.7 billion for the three months ended September 30, 2020. This reflects increases of ~~2% on an~~12% in underlying ~~basis~~revenue and 2% from acquisitions. Consulting revenue of $1.7 billion in the third quarter of 2020 decreased 5%, reflecting decreases of 4% on an underlying basis and 2% from the disposition of businesses, partly offset by an increase of 1% from the impact of foreign currency translation.

~~For~~Consulting revenue increased $616 million, or 12% to $5.7 billion for the ~~first~~ nine months ~~of 2020, consolidated revenue increased 3%.~~ended September 30, 2021, compared to $5.1 billion for the nine months ended September 30, 2020. This reflects increases of ~~1% on an~~9% in underlying ~~basis~~revenue and ~~a decrease of 1%~~4% from the impact of foreign currency ~~translation. Risk and Insurance Services revenue increased 8% from the same period in 2019. This reflects increases of 3% on an underlying basis and 1% from acquisitions partly~~translation offset by a decrease of 1% from the ~~impact of foreign currency translation when compared with 2019.~~

~~Consulting revenue decreased 4% compared with the nine month period last year. Revenue decreased 2% on an underlying basis and 2% from dispositions~~disposition of businesses.

~~Operating Expense~~

~~The Company incurred approximately $59~~Mercer's revenue increased $99 million, ~~and $98 million of operating expenses~~ or 8% to $1.3 billion for the three ~~month periods~~months ended September 30, 2021 compared to $1.2 billion for the three months ended September 30, 2020, ~~and September 30, 2019, respectively, related to JLT acquisition, integration and restructuring charges as previously discussed.~~

~~Consolidated operating expense in the third quarter decreased 2%compared with the same period last year. Expense decreased 4%~~or 7% on an underlying ~~basis offset by~~basis. Revenue also reflects an increase of 1% from the impact of foreign currency translation and an increase of 1% from acquisitions. The underlying expense decrease reflects lower travel and entertainment, meeting costs and outside services resulting from the Company’s restrictions on travel and cost containment measures taken in light of COVID-19 offset by an increase in base salaries and incentive compensation. The Company also incurred lower acquisition, integration and restructuring charges related to the JLT Transaction and savings realized from the completion of integration efforts to date.

~~The Company incurred approximately $222 million~~ ~~and $325 m~~illion of operating expenses for the nine month periods ended September 30, 2020 and September 30, 2019, respectively, related to JLT acquisition, integration and restructuring charges as discussed above.

~~Consolidated operating expenses for the first nine months of 2020 was essentially flat as compared to the same period in 2019, reflecting decreases of 3% on an underlying basis and 1%~~2% from the impact of foreign currency translation offset by a 1% ~~increase~~decrease from ~~acquisitions when compared with 2019. The decrease in~~dispositions. On an underlying ~~expenses is primarily due to the items discussed above.~~

~~Risk~~basis, revenue for Health and ~~Insurance Services~~

~~The results of operations for the Risk~~Wealth increased 4% and ~~Insurance Services segment are presented below:~~

For the Three and Nine Months Ended September 30, Three Months Nine Months
(In millions) 2020 2019 2020 2019
Revenue $ 2,291 $ 2,206 $ 7,805 $ 7,203
Compensation and Benefits 1,400 1,373 4,234 4,012
Other Operating Expenses 558 615 1,688 1,723
Expense 1,958 1,988 5,922 5,735
Operating Income $ 333 $ 218 $ 1,883 $ 1,468
Operating Income Margin 14.5 % 9.9 % 24.1 % 20.4 %

~~Revenue~~

~~Revenue in the Risk and Insurance Services segment in the third quarter of 2020 was $2.3 billion, an increase of 4%~~6% respectively, while Career increased 13% as compared to the same period last ~~year.~~year.

Mercer's revenue increased $261 million, or 7% to $3.9 billion for the nine months ended September 30, 2021 compared to $3.6 billion for the nine months ended September 30, 2020. This reflects ~~increases of 2% in underlying revenue and 2% from acquisitions.~~

~~At Marsh, revenue in the third quarter of 2020 was $2.0 billion,~~ an increase of 6% when compared to the same period last year. This reflects increases in underlying revenue of 3% and a 3% increase from acquisitions. In U.S./Canada, underlying revenue increased 5%. Revenue in International operations increased 2% on an underlying basis, with increases of 4% in Asia Pacific and 2% in Latin America. EMEA was flat as compared to prior year. Guy Carpenter's third quarter revenue was slightly higher than last year. Interest earned on fiduciary funds decreased $23 million compared to the third quarter of 2019.

Revenue in the Risk and Insurance Services segment increased 8% for the first nine months of 2020 compared with 2019. This reflects increases of 3% on an underlying basis and 1% from acquisitions, partly offset by a 1% decrease from the impact of foreign currency. In Marsh, underlying revenue increased 4% in U.S./Canada. The International division increased 2% on an underlying basis, reflecting increases of 4% in Asia Pacific, 3% in Latin America and 1% in EMEA. Guy Carpenter's revenue in the first nine months of 2020 increased 15%, reflecting a 6% increase on an underlying basis.

~~Expense~~

Expenses in the Risk and Insurance Services segment decreased 1% in the third quarter of 2020 compared with the same period last year. This reflects decreases of 5% in underlying expense, partly offset by an increase of 3% from acquisitions. The decrease in underlying expense reflects lower JLT acquisition, restructuring and integration related costs of $34 million and savings realized from the completion of integration efforts to date. The decrease also reflects lower travel and entertainment and meeting costs resulting from the Company’s restrictions on travel and cost containment measures taken in light of COVID-19.

~~Expenses for the first nine months of 2020 increased 3% compared to the prior year. This reflects decreases of 3% in underlying expenses and 1%~~ from the impact of foreign currency translation ~~partly offset by an increase of 2% from acquisitions. The underlying expense decrease is primarily due to the items discussed in the previous paragraph.~~

~~Consulting~~

~~The results of operations for the Consulting segment are presented below:~~

For the Three and Nine Months Ended September 30, Three Months Nine Months
(In millions) 2020 2019 2020 2019
Revenue $ 1,696 $ 1,785 $ 5,074 $ 5,258
Compensation and Benefits 980 967 2,911 2,932
Other Operating Expenses 438 501 1,348 1,452
Expense 1,418 1,468 4,259 4,384
Operating Income $ 278 $ 317 $ 815 $ 874
Operating Income Margin 16.4 % 17.7 % 16.1 % 16.6 %

~~Revenue~~

~~Consulting revenue in the third quarter of 2020 was $1.7 billion, a decrease of 5% compared to the same period last year. This reflects decreases of~~and 4% in underlying revenue, ~~and 2% from the disposition of businesses, partly~~ offset by ~~an increase of~~a 1% decrease from ~~the impact of foreign currency translation.~~

Mercer's revenue of approximately $1.2 billion in the third quarter of 2020 decreased 5% compared to the same period last year. This reflects decreases of 3% on an underlying basis and 2% from dispositions of businesses.dispositions. On an underlying basis, revenue in Health ~~was flat, while~~and Wealth ~~decreased~~increased 3% and 4%, respectively, while Career ~~decreased 11%~~increased 10% as compared to prior year. The increase in underlying revenue at Mercer for the three and nine months ended September 30, 2021 was due to higher investment management fees from growth in assets under management and increased demand and retention for Health and Career products and services.

Oliver Wyman's revenue ~~decreased 5%~~increased $130 million, or 27% to $610 million for the three months ended September 30, 2021 compared to $480 million for the three months ended September 30, 2020, reflecting ~~a decrease~~an increase of 6%25% on an underlying basis ~~offset by~~and a 1% increase from the impact of foreign currency translation.

~~For~~Oliver Wyman's revenue increased $355 million, or 24% to $1.8 billion for the nine months ended September 30, 2021 compared to $1.5 billion for the nine months ended September 30, 2020, ~~revenue decreased 4% in the Consulting segment as compared to the same period last year. Underlying revenue decreased 2%,~~ reflecting ~~decreases~~an increase of ~~1% at Mercer and 6% at Oliver Wyman.~~

~~Expense~~

~~Consulting expenses in the third quarter of 2020 decreased 4% as compared to the third quarter of 2019. This reflects decreases of 4%~~21% on an underlying basis and a 3% increase from the impact of foreign currency translation. The increase in underlying revenue at Oliver Wyman for the three and nine months ended September 30, 2021 primarily reflects the impact of increased demand for project-based services in the U.S.

Operating Expense

Consolidated operating expense increased $415 million, or 12% to $3.8 billion for the three months ended September 30, 2021 compared to $3.4 billion for the three months ended September 30, 2020, reflecting increases of 9% on an underlying basis, 2% from the impact of foreign currency translation and 1% from ~~dispositions~~acquisitions. On an underlying basis, expenses increased 12% and 6% for the three months ended September 30, 2021 in Risk and Insurance Services and Consulting, respectively.

Consolidated operating expense increased $1.0 billion, or 10% to $11.4 billion for the nine months ended September 30, 2021 compared to $10.3 billion for the nine months ended September 30, 2020, reflecting increases of 6% on an underlying basis, 3% increase from the impact of foreign currency translation and 1% from acquisitions. On an underlying basis, expenses increased 7% and 5% for the nine months ended September 30, 2021 in Risk and Insurance Services and Consulting, respectively. Underlying expenses for the three and nine months ended September 30, 2021 primarily reflect higher incentive compensation and increase in base salaries for additional headcount.

Risk and Insurance Services

Expenses in the Risk and Insurance Services segment increased $309 million, or 16% to $2.3 billion for the three months ended September 30, 2021 compared to $2.0 billion for the three months ended September 30, 2020. This reflects increases of 2% for both foreign currency translation and acquisitions. On an underlying basis, expenses increased 12%, reflecting the impact of higher incentive compensation and increases in base salaries for additional headcount.

Expenses in the Risk and Insurance Services segment increased $701 million, or 12% to $6.6 billion for the nine months ended September 30, 2021 compared to $5.9 billion for the nine months ended September 30, 2020. This reflects increases of 3% for foreign currency translation and 2% for acquisitions. On an underlying basis, expenses increased 7%, reflecting higher incentive compensation and increases in base salaries for additional headcount, partly offset by ~~an increase~~lower JLT integration and restructuring costs.

Consulting

Consulting expenses increased $103 million, or 7% to $1.5 billion for the three months ended September 30, 2021 compared to $1.4 billion for the three months ended September 30, 2020. This reflects increases of 1% from the impact of foreign currency ~~translation. Thedecrease in~~translation and 6% on an underlying expense reflects lower travel and entertainment, meeting costs and outside services resulting from the Company’s restrictions on travel and cost containment measures taken in light of COVID-19 and lower recoverable expenses, offset by higher incentive compensation expense.basis.

Consulting expenses inincreased $322 million, or 8% to $4.6 billion for the nine months ended September 30, 2021 compared to $4.3 billion for the first nine months ended September 30, 2020. This reflects an increase of ~~2020 decreased~~ 3% ~~as compared to~~from the ~~same period~~impact of ~~2019, reflecting a decrease of 2%~~foreign currency translation and 5% on an underlying basis. The ~~decrease~~increase in underlying expense in the Consulting segment for the three and nine months ended September 30, 2021 primarily reflects ~~lower travel~~higher incentive compensation expense, partially offset by a $63 million reduction in the liability for a legacy JLT E&O, as well as recoveries under indemnities and ~~entertainment, meeting costs and outside services resulting from the Company’s restrictions on travel and cost containment measures taken in light of COVID-19 and lower recoverable expense.~~insurance.

Corporate and Other

Corporate expenses were ~~$71 million in the third quarter of 2020, compared with $68 million in the same period of 2019 and $203 million and $257~~$67 million for the ~~nine month periods~~three months ended September 30, 2021 compared to $71 million for the three months ended September 30, 2020 and 2019, respectively. The decrease for the nine month period is primarily due to lower acquisition, integration and restructuring costs primarily related to the JLT Transaction and savings realized from the completion of integration efforts to date.

~~Interest~~

~~Interest income earned on corporate funds was $1~~$196 million ~~for the three month periods ending September 30, 2020 compared to $4 million for the same period in 2019. Interest income~~ for the nine months ended September 30, ~~2020 was $5 million~~2021 compared to $34 million for the same period of 2019. During the first quarter of 2019, the Company issued approximately $6.5 billion of senior notes related to the JLT acquisition. The funds were held in escrow and released for payment in April when the acquisition was completed. The decrease in interest income from the prior year is due to interest earned on these funds in 2019.

Interest expense decreased $5 million in the third quarter of 2020 compared with the third quarter of 2019 due to a lower level of commercial paper borrowings and the impact of lower interest rates on variable rate borrowings. Interest expense decreased $7$203 million for the nine months ended September 30, 2020. The decrease is primarily due to lower integration and restructuring costs.

Interest

Interest expense decreased $21 million and $52 million in the three and nine months ended September 30, 2021 compared with the same periods of 2020 due to lower average debt levels in 2021 compared ~~to prior~~with the same period last year.

Investment Income (Loss) ~~Income~~

The caption "Investment income (loss) ~~income"~~" in the consolidated statements of income comprises realized and unrealized gains and losses from investments. It includes, when applicable, ~~other-than-temporary~~other than temporary declines in the value of securities, mark-to-market ~~increases/~~increases or decreases in equity investments with readily determinable fair values and equity method gains or losses on its investments in private equity funds. The Company's investments may include direct investments in insurance, consulting or other strategically linked companies and investments in private equity funds.

The Company recorded net investment income of $13 million and $43 million for the three and nine periods ended September 30, 2021 compared to net investment losses of $14 million and $47 million for the ~~three and nine-month~~same periods ~~ended September 30, 2020,~~last

year. The income in 2021 is primarily driven by gains in the Company's private equity investments compared to ~~net investment income of $7 million and $20 million~~losses for the ~~three and nine-month~~same periods ~~ended September 30, 2019.~~in prior year. The net investment loss reported in the third quarter of 2020 is primarily

due to the mark-to-market change related to the Company's investment in ~~AF. The net investment loss for the nine-months ended September 30, 2020~~Alexander Forbes ("AF"). Prior year also ~~includes~~included a loss of $23 million ~~from~~for the ~~sale of shares of AF during the second quarter of 2020, as well as losses related to its private equity fund investments. The three and nine-month periods~~nine month period ended September 30, ~~2019 include gains of $4 million and $10 million are~~2020 related to ~~mark-to-market changes~~the Company's investment in ~~equity securities and gains of $3 million and $10 million related to investments in private equity funds and other investments.~~AF.

Income and Other Taxes

As noted above, on April 1, 2019, the Company completed the JLT Transaction. The integration of this global organization required intercompany transfers of acquired entities into the Company's country structures and combination of those entities within the equivalent Company businesses. The integration transactions were designed to be tax efficient. The Company's global effective tax rate on JLT's earnings was reduced compared to JLT's pre-acquisition tax rate by utilizing debt for the restructuring transactions to be capital efficient, and reducing the generation of post-acquisition tax losses by merging historically unprofitable JLT entities with profitable Company operations. The provisions for deferred taxes and uncertain tax positions were established as part of the purchase price allocation as of April 1, 2019.

The broader JLT organization is now held under the Company, which makes it part of a U.S.-based multinational company and subjects it to full U.S. taxation. The integration of the JLT entities into the Company's entities, where applicable, should be substantially complete by the end of 2020.

The rate in the third quarter of ~~2020~~2021 reflects tax benefits from planning implemented in the period that postponed the utilization of current-year losses in the U.K. to a future year when the tax rate will be 25%, additional tax benefits related to share-based compensation offset by changes to uncertain tax positions, deferred tax and ~~2019 were 26.0%~~other tax adjustments. The rate for the nine months ended September 30, 2021 reflects the charge recorded in the second quarter of approximately $100 million for re-measuring the Company’s U.K. deferred tax assets and ~~27.8%.The~~liabilities upon the enactment of legislation on June 10, 2021, commonly referred to as the "Finance Act 2021". The legislation increased the U.K. corporate income tax rate from 19% to 25% effective April 1, 2023. This is the most significant discrete item in the year-to-date period, increasing the Company’s effective tax rate by 3.1% for the nine months ended September 30, 2021.

The rate in the third quarter and ~~the first~~ nine months ofended September 30, 2020 reflects costs of re-measuring the Company’s UKU.K. deferred tax ~~liability for~~assets and liabilities upon the enactment of legislation that cancelled a scheduled 2% reduction in the U.K. corporate income tax rate, partially offset by tax benefits ~~related to~~for the implementation of a new international funding structure ~~implemented~~ to facilitate global staffing and contracting.The rate in the first nine months of 2019 reflects discrete adjustments related to the JLT acquisition, including tax on the disposition of JLT’s aerospace business and nondeductible expenses incurred in connection with the JLT Transaction.

The tax rates in ~~all~~both periods reflect the impact of discrete tax matters such as excess tax benefits related to share-based compensation, ~~changes in~~enacted tax legislation, changes in uncertain tax positions, deferred tax adjustments and non-taxable adjustments to contingent acquisition consideration.

The effective tax rate may vary significantly from period to ~~period for the foreseeable future.~~period. The effective tax rate is sensitive to the geographic mix and repatriation of the Company's earnings, which may result in higher or lower effective tax rates. Thus, a shift in the mix of profits among jurisdictions, or changes in the Company’s repatriation strategy to access offshore cash, can affect the effective tax rate.

In addition, losses in certain jurisdictions cannot be offset by earnings from other operations, and may require valuation allowances that affect the rate in a particular period, depending on estimates of the value of associated deferred tax assets which can be realized. A valuation allowance was recorded to reduce deferred tax assets to the amount that the Company believes is more likely than not to be realized. The effective tax rate is also sensitive to changes in unrecognized tax benefits, including the impact of settled tax audits and expired statutes of limitation.

Changes in tax laws, rulings, policies or related legal and regulatory interpretations occur frequently and may have a significant favorable or adverse impact on our effective tax rate.

As a U.S. domiciled parent holding company, ~~Marsh & McLennan Companies, Inc.~~the Company is the issuer of essentially all of the ~~Company's~~ external indebtedness and incurs the related interest expense in the U.S. The Company’s interest

expense deductions are not currently limited. Further, most senior executive and oversight functions are conducted in the U.S. and the associated costs are incurred primarily in the ~~United States.~~U.S. Some of these expenses may not be deductible in the U.S., which may impact the effective tax rate.

The quasi-territorial U.S. tax regime provides an opportunity for the Company to repatriate foreign earnings more tax efficiently and there is less incentive for permanent reinvestment of these earnings. However, permanent reinvestment continues to be a component of the Company’s global capital strategy. For ~~post-2017~~post 2017 years, including ~~2020,~~2021, the Company continues to evaluate its global investment and repatriation strategy in light of its capital requirements, considering the ~~impact of~~Tax Cuts and Jobs Act (the "TCJA") and the quasi-territorial tax regime for future foreign earnings.

The Company has established liabilities for uncertain tax positions in relation to potential assessments in the jurisdictions in which it operates. The Company believes the resolution of tax matters will not have a material effect on the consolidated financial position of the Company, although a resolution of tax matters could have a material impact on the Company's net income or cash flows and on its effective tax rate in a particular future period. It is reasonably possible that the total amount of unrecognized tax benefits will decrease between zero and approximately ~~$22~~$33 million within the next twelve months due to settlement of audits and expiration of statutes of limitation.

The Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") was signed into law on March 27, 2020. The CARES Act provided over $2 trillion in economic relief to individuals, governmental agencies and companies, to deal with the public health and economic impacts of COVID-19. Pursuant to the CARES Act, payroll taxes due from March 27, 2020 through December 31, 2020 ~~will be~~were deferred until 2021 and 2022 (50% to be paid each year) without interest or penalties.

~~The Company’s accounting policy related to releasing income tax effects from AOCI follows the portfolio approach.~~

Liquidity and Capital Resources

The Company is organized as a legal entity separate and distinct from its operating subsidiaries. As the Company does not have significant operations of its own, the Company is dependent upon dividends and other payments from its operating subsidiaries to pay principal and interest on its outstanding debt obligations, pay dividends to stockholders, repurchase its shares and pay corporate expenses. The Company can also provide financial support to its operating subsidiaries for acquisitions, investments and certain parts of their business that require liquidity, such as the capital markets business of Guy Carpenter. Other sources of liquidity include borrowing facilities discussed ~~below~~ in financing cash flows.

The Company derives a significant portion of its revenue and operating profit from operating subsidiaries located outside of the United States. Funds from those operating subsidiaries are regularly repatriated to the United States out of annual earnings. At September 30, ~~2020,~~2021, the Company had approximately ~~$736~~$815 million of cash and cash equivalents in its foreign operations, which includes ~~$231~~$283 million of operating funds required to be maintained for regulatory requirements or as collateral under certain captive insurance arrangements. The Company expects to continue its practice of repatriating available funds from its non-U.S. operating subsidiaries out of current annual earnings. Where appropriate, a portion of the current year earnings will continue to be permanently reinvested. With respect to repatriating 2018 and prior earnings, the Company has evaluated such factors as its short- and long-term capital needs, acquisition and borrowing strategies, and the availability of cash for repatriation for each of its subsidiaries. The Company has determined that, in general, its permanent reinvestment assertions, in light of the enactment of the Tax Cuts and Jobs Act, should allow the Company to repatriate previously taxed earnings from the deemed repatriations as cash becomes available.

During the first nine months of ~~2020,~~2021, the Company recorded foreign currency translation adjustments which decreased net ~~equity~~ equity by ~~$196~~$413 million. StContinu~~rengthening~~ed strengthening of the U.S. dollar against foreign currencies would ~~reduce~~further decrease the translated U.S. dollar value of the Company’s net investments in its non-U.S. subsidiaries, as well as the translated U.S. dollar value of cash repatriations from those subsidiaries.

Cash on our consolidated balance sheets includes funds available for general corporate purposes. Funds held on behalf of clients in a fiduciary capacity are segregated and shown separately in the consolidated balance sheets as an offset to fiduciary liabilities. Fiduciary funds cannot be used for general corporate purposes, and should not be considered as a source of liquidity for the Company.

Operating Cash Flows

The Company ~~generated $2.0~~generated $2.1 billion of ~~cash~~cash from operations for the nine ~~month period~~months ended September 30, ~~2020~~2021 compared to ~~$1.3~~$2.0 billion ~~generated~~generated by operations in the first nine months of ~~2019.~~2020. These amounts reflect the net income of the Company during those periods, excluding gains or losses from investments, adjusted for non-cash

charges and changes in working capital which relate primarily to the timing of payments of accrued liabilities and pension plan contributions or receipts of assets. The ~~Company~~Company paid $58 million and $169 million related to the JLT integration and restructuring activity for the nine months ended September 30, ~~2020.~~2021 and 2020, respectively.

Pension Related Items

Contributions

The Company's policy for funding its tax-qualified defined benefit plans is to contribute amounts at least sufficient to meet the funding requirements set forth in accordance with applicable law. During the first nine months of 2021, the Company contributed $63 million to its non-U.S. defined benefit pension plans and $27 million to its U.S. defined benefit pension plans. In the first nine months of 2020, the Company contributed $56 million to its non-U.S. defined benefit pension plans and $25 ~~million to its U.S. defined benefit pension plans. In the first nine months of 2019, the Company contributed $58 million to its non-U.S. defined benefit pension plans and $27~~ million to its U.S. defined benefit pension plans.

In the United States, contributions to the tax-qualified defined benefit plans are based on ERISA guidelines.

Outside the ~~United States,~~U.S., the Company has a large number of non-U.S. defined benefit pension plans, the largest of which are in the U.K., which comprise approximately 81% of non-U.S. plan assets at December 31, ~~2019.~~2020. Contribution rates for non-U.S. plans are generally based on local funding practices and statutory requirements, which may differ significantly from measurements under U.S. GAAP.

In the U.K., the assumptions used to determine pension contributions are the result of legally-prescribed negotiations between the Company and the plans' trustee that typically occur every three years in conjunction with

the actuarial valuation of the plans. Currently, this results in a lower funded status ~~than under~~compared to U.S. GAAP and may result in contributions irrespective of the U.S. GAAP funded status. For the MMC U.K. Pension Fund, a new agreement was reached with the trustee in the fourth quarter of 2019 based on the surplus funding position at December 31, 2018. ~~Under~~In accordance with the agreement, no deficit funding is required until 2023. The funding level will be re-assessed during 2022 to determine if contributions are required in 2023. ~~As part of a long-term strategy, which depends on having~~In order to have greater influence over asset allocation and overall investment decisions, in November 2019, the Company renewed its agreement to support annual deficit contributions by the U.K. operating companies under certain circumstances, up to GBP 450 million over a seven-year period. ~~In addition, in~~

The Company has agreed to a deficit funding plan with the trustee of the U.K. ~~the Company assumed responsibility for the~~ JLT ~~U.K. plan. Deficit funding of approximately $28~~ Pension Scheme to fund $41 million ~~is expected during 2020 with a new funding agreement expected to be reached with the Trustee~~ in ~~early~~ 2021.

The Company expects to ~~fund~~fund an ~~additional $25~~additional $31 million to its non-U.S. defined benefit plans over the remainder of ~~2020,~~2021, comprising approximately ~~$16~~$17 million to plans outside of the U.K. and $9$14 million to the U.K. plans.The Company expects to fund an additional ~~$38~~$8 million to its U.S. defined benefit plans ~~during~~during the remainder of ~~2020.~~2021.

As part of the JLT Transaction, the Company has assumed responsibility for a number of pension plans throughout the world, with $255 million of net pension liabilities as of December 31, 2019 (approximately $1 billion of plan liabilities and $748 million of plan assets as of December 31, 2019), the most significant of which is the JLT U.K. plan. The JLT U.K. plan has a defined benefit section which was frozen to future accrual in 2006 and a defined contribution section. The assets of the scheme are held in a trustee administered fund separate from the Company.

Financing Cash Flows

Net cash used for financing activities was ~~$163 million~~$2.0 billion for the ~~nine-month period~~nine months ended September 30, ~~2020,~~2021, compared with ~~$4.3 billion~~$163 million of net cash ~~provided~~used by such activities for the same period in ~~2019.~~2020.

On April 9, 2021, the Company increased its short-term commercial paper financing program to $2.0 billion from $1.5 billion. The Company had no commercial paper outstanding at September 30, 2021.

Credit Facilities

In January 2020, the Company entered into two new term loan facilities: a $500 million one-year facility and a $500 million two-year facility. The interest rate on these facilities is based on LIBOR plus a fixed margin which varies with the Company's credit ratings. The facilities require the Company to maintain coverage ratios and leverage ratios consistent with the revolving credit facility discussed above. The facilities include a provisionNew Facility includes provisions for determining a LIBOR successor rate in the event LIBOR reference rates are no longer available or in certain other circumstances which ~~is expected~~are determined to ~~occur by~~make using an alternative rate desirable. As of September 30, 2021, the ~~end of 2021.These facilities are expected to expire~~Company had no borrowings under this facility. In connection with the New Facility, the Company terminated its previous multicurrency unsecured $1.8 billion five-year revolving credit facility and its unsecured $1 billion 364-day unsecured revolving credit facility ("364-day Facility").

In January 2020, the Company closed on ~~or around the time that LIBOR is expected to be replaced by a successor rate~~.$500 million one-year and $500 million two-year term loan facilities. In the first quarter of 2020 the Company borrowed $1 billion against these ~~facilities. During~~facilities, which were subsequently repaid during the third ~~quarter~~and fourth quarters of 2020. These two facilities were terminated as of December 31, 2020 after repayment of the initial draw down.

Debt

On April 15, 2021, the Company repaid $500 million of ~~borrowings from its one-year facility. The Company had~~

~~$500 million of borrowings outstanding under its two-year facility and no borrowings outstanding under its one-year facility at September 30, 2020.~~

In April 2020, the Company entered into a new 364 day $1 billion unsecured revolving credit facility with a term out option after one year. The facility has similar coverage and leverage ratios as the facility discussed above. The Company had no borrowings outstanding under this facility at September 30, 2020.

~~Debt~~

The Company has established a short-term debt financing program of up to $1.5 billion through the issuance of commercial paper. The proceeds from the issuance of commercial paper are used for general corporate purposes. The Company had no commercial paper outstanding at September 30, 2020.senior notes maturing in July 2021.

In May 2020, the Company issued $750 million of ~~2.250% Senior Notes due 2030. The Company used the net proceeds from this offering to pay outstanding borrowings under the revolving credit facility discussed above.~~senior notes.

In March 2020, the Company repaid $500 million of maturing ~~Senior Notes.~~

~~In September 2019, the Company repaid $300 million of maturing Senior Notes.~~

In March 2019, the Company issued €550 million of 1.349% Senior Notes due 2026 and €550 million of 1.979% Senior Notes due 2030. In addition, the Company issued an additional $250 million of 4.375% Senior Notes due 2029, in March 2019. These notes constitute a further issuance of the 4.375% Senior Notes due 2029, of which $1.25 billion aggregate principal amount was issued in January 2019 (see below). After giving effect to the issuance of the notes, the Company has $1.5 billion aggregate principal amount of 4.375% Senior Notes due 2029. The Company used part of the net proceeds from these offerings, along with the $5 billion of Senior Notes issued in January 2019 (discussed above) to primarily fund the acquisition of JLT, including the payment of related fees and expenses, and to repay certain JLT indebtedness, as well as for general corporate purposes.

In January 2019, the Company issued $5 billion aggregate amount of Senior Notes consisting of $700 million of 3.50% Senior Notes due 2020, $1 billion of 3.875% Senior Notes due 2024, $1.25 billion of 4.375% Senior Notes due 2029, $500 million of 4.75% Senior Notes due 2039, $1.25 billion of 4.90% Senior Notes due 2049 and $300 million of Floating Rate Senior Notes due 2021.

In connection with the closing of the JLT Transaction, the Company assumed approximately $1 billion of historical JLT indebtedness. In April and June of 2019, the Company repaid approximately $450 million and $553 million, respectively, representing all of JLT's debt it acquired upon the acquisition of JLT. The Company incurred debt extinguishment costs of $32 million in regard to the repayment of this debt.senior notes.

The Company's senior debt is currently rated A- by Standard & Poor's ("S&P") and Baa1 by Moody's. The Company's short-term debt is currently rated A-2 by S&P and P-2 by ~~Moody's and A-2 by Standard & Poor's.~~Moody's. The Company carries a ~~negative~~Stable outlook ~~from Moody's~~with both S&P and ~~Standard & Poor's.~~Moody's.

Share Repurchases

~~There were no repurchases of the Company's common stock during the nine month period ending September 30, 2020. The Company does not expect to repurchase shares for the remainder of 2020.~~ In November 2019, the Board of Directors authorized an increase in the Company’s share repurchase program, which supersedes any prior authorization, allowing management to buy back up to $2.5 billion of the Company’s common stock. During the first nine months of 2021, the Company repurchased 5.3 million shares of its common stock for total consideration of approximately $734 million. As of September 30, ~~2020,~~2021, the Company remained authorized to purchase shares of its common stock up to a value of approximately ~~$2.4~~$1.7 billion. There is no time limit on this authorization. ~~During~~There were no repurchases of the ~~first~~Company's common stock during the nine months ~~of 2019 the Company repurchased approximately 3.1 million shares of its common stock for consideration of $300 million.~~ending September 30, 2020.

Contingent Payments Related to Acquisitions

During the first nine months of ~~2020,~~2021, the ~~Company~~Company paid ~~$101~~$72 million of contingent payments related to acquisitions made in prior ~~periods.~~periods and received cash of $90 million related to dispositions made in prior years. These payments are split between financing and operating cash flows in the consolidated statements of cash flows. Payments of ~~$65~~$26 million related to the contingent consideration liability that was recorded on the date of acquisition are reflected as financing cash flows. Payments related to increases in the contingent consideration liability subsequent to the date of acquisition of ~~$36~~$46 million are ~~reflected~~reflected as operating cash flows. Operating cash flows also include cash receipts of approximately $19 million due to increases in the contingent consideration receivables subsequent to the date of dispositions. Remaining estimated future contingent ~~consideration payments~~consideration payments of $303 million ~~of $230 million~~ for acquisitions completed in the first nine months of ~~2020~~2021 and in prior years are recorded in accounts payable and accrued liabilities or other liabilities in the consolidated balance sheet at September 30, 2021.

The Company paid deferred purchase consideration related to prior years' acquisitions of $84 million in the first nine months of 2021. Financing cash flows also reflect the receipt of contingent consideration of $71 million related to prior year dispositions. Remaining deferred cash payments of approximately $203 million for acquisitions completed in prior years are recorded in accounts payable and accrued liabilities or other liabilities in the consolidated balance sheet at September 30, ~~2020.~~2021.

~~The Company paid deferred purchase consideration related to prior years' acquisitions of $60 million in the first nine months of 2020. Remaining deferred cash payments of approximately~~ ~~$235 million fo~~r acquisitions completed in the first nine months of 2020 and in prior years are recorded in accounts payable and accrued liabilities or other liabilities in the consolidated balance sheet at September 30, 2020.

In the first nine months of ~~2019,~~2020, the Company paid ~~$58~~$101 million of contingent payments related to acquisitions made in prior periods. Of this amount, ~~$23~~$65 million was reported as financing cash flows and ~~$35~~$36 million as operating cash flows.

Dividends

The Company paid dividends on its common shares of $750 million ($1.465 per share) during the first nine months of 2021, as compared with $702 million ($1.375 per share) during the first nine months of ~~2020, as compared with $655 million ($1.285 per share) during the first nine months of 2019.~~2020.

Derivatives

~~Foreign Exchange Forward Contract~~

In connection with the JLT Transaction, to hedge the risk of appreciation of the GBP-denominated purchase price relative to the U.S. dollar, on September 20, 2018, the Company entered into the FX Contract to, solely upon consummation of the Transaction, purchase £5.2 billion and sell a corresponding amount of U.S. dollars at a contractedexchange rate. The FX Contract, which did not qualify for hedge accounting treatment under applicable accounting guidance, is discussed in Note 11 to the consolidated financial statements. The Company recorded a gain of $31 million related to the FX contract for the nine month period ended September 30, 2019. The Company settled the FX Contract on April 1, 2019.

~~Foreign Exchange Contract on Euro Debt Issuance~~

In March 2019, the Company issued €1.1 billion of senior notes related to the JLT Transaction. See Note 14 for additional information related to the Euro senior note issuances. In connection with the senior note issuances of €1.1 billion, the Company entered into a forward exchange contract to hedge the economic risk of changes in foreign exchange rates from the issuance date to settlement date of the Euro senior notes. Upon settlement of this contract, the Company recorded a charge of $7 million in the consolidated statement of income for the nine month period ended September 30, 2019.

~~Treasury Locks on Senior Notes~~

In connection with the JLT Transaction, to hedge the risk of increases in future interest rates prior to its issuance of senior notes, in the fourth quarter of 2018, the Company entered into treasury locks related to $2 billion of the expected debt. The fair value at December 31, 2018 was based on the published treasury rate plus forward premium as of December 31, 2018 compared to the all in rate at the inception of the contract. The contracts were not designated as an accounting hedge. The Company recorded an unrealized loss of $116 million related to the change in the fair value of these derivatives in the consolidated statement of income for the twelve month period ended December 31, 2018. In January 2019, upon issuance of the $5 billion of senior notes, the Company settled the treasury lock derivatives and made a payment to its counter party for $122 million. Upon settlement, an additional charge of $6 million was recorded in the consolidated statement of income in the first quarter of 2019.

Net Investment Hedge

The Company has investments in various subsidiaries with Euro functional currencies. As a result, the Company is exposed to the risk of fluctuations between the Euro and U.S. dollar exchange rates. As part of its risk management program to fund the JLT acquisition, the Company issued €1.1 billion ~~senior notes, as discussed above,~~Senior Notes, and designated the debt instruments as a net investment hedge of its Euro denominated subsidiaries. The hedge is re-assessed each quarter to confirm that the designated equity balance at the beginning of each period continues to equal or exceed 80% of the outstanding balance of the Euro debt instrument and that all the critical terms of the hedging instrument and the hedged net investment continue to match. ~~If the~~The Company ~~concludes~~concluded that the hedge iscontinues to be highly effective as of September 30, 2021, and the change in the debt balance related to foreign exchange fluctuations ~~will be~~was recorded in foreign currency translation gains (losses) in the consolidated balance sheet. The U.S. dollar value of the Euro notes ~~increased~~decreased by ~~$60~~$63 million ~~during the first nine months of 2020 related~~through September 30, 2021 due to the ~~change in~~impact foreign exchange ~~rates. Since the Company concluded that the hedge was highly effective, it recorded~~rates, with a corresponding decrease to ~~foreign currency translation gains (losses) for the nine months ended September 30, 2020.~~accumulated other comprehensive loss.

Investing Cash Flows

Net cash used for investing activities ~~amounted~~amounted to ~~$646~~$589 million in ~~the~~the first nine months of ~~2020,~~2021, compared with ~~$5.5 billion~~$646 million used during the same period in ~~2019.~~2020.

~~As previously noted, the JLT Transaction closed on April 1, 2019. Funds for the purchase of outstanding shares were distributed on April 11, 2019.~~

The Company ~~paid~~paid $401 million and $559 million, ~~and $5.5 billion,~~ net of cash acquired, for acquisitions it made during the first nine months of 2021 and 2020, ~~and 2019,~~ respectively.

During the first nine months of 2021 and 2020, the Company sold certain businesses, primarily in the U.S.~~, U.K.~~ and ~~Canada~~U.K., for cash proceeds of ~~approximately~~approximately $84 million and $93 ~~million.~~million, respectively.

At December 31, 2019, the Company owned approximately 443 million shares of the common stock of Alexander Forbes ("AF"), a South African company listed on the Johannesburg Stock Exchange, which was accounted for under the equity method of accounting. In February 2020, the Company sold approximately 49 million shares, and in May 2020, sold an additional 193 million shares to third parties, leaving the Company with an investment of approximately 201 million shares of the common stock of AF at September 30, 2020. Upon completion of the May transaction, the investment in AF is accounted at fair value, with investment gains and losses recorded as investment income in the consolidated statement of income.

During the first quarter of 2019, the Company disposed of its investment in Benefitfocus for total proceeds of approximately $132 million. The Company received $115 million in the first quarter of 2019 and $17 million in the second quarter of 2019 as final settlement on the sale.

~~During the second quarter of 2019, the Company disposed of its investment in Payscale and received proceeds of approximately $47 million.~~

~~In January 2019, Marsh increased its equity ownership in Marsh India from 26% to 49% for approximately $88 million. Marsh India is carried under the equity method.~~

The Company used cash of ~~$278~~$268 million to purchase fixed assets and capitalized software in the first nine months of ~~2020,~~2021, compared with ~~$284~~$278 million in the first nine months of ~~2019,~~2020, primarily related to computer equipment and software purchases, software development costs and the refurbishing and modernizing of office facilities.

In 2020, the Company sold approximately 240 million shares of the common stock of AF.

The Company has commitments for potential future investments of ~~approximate~~appr~~ly $51~~oximately $27 million i~~n four~~in five private equity funds that invest primarily in financial services companies.

Commitments and Obligations

The following table reflects the Company’s contractual obligations ~~of the types identified in the table below were of the following amounts~~by type as of September 30, ~~2020:~~2021:


(In millions)	(In millions)	Payment due by Period										(In millions)	Payment due by Period
Contractual Obligations	Contractual Obligations	Total		Within 1 Year		1-3 Years		4-5 Years		After 5 Years		Contractual Obligations	Total		Within 1 Year		1-3 Years		4-5 Years		After 5 Years

Term loan facility		500		—		500		—		—

Short-term debt	Short-term debt	1,216		1,216		—		—		—		Short-term debt	$	516	$	516	$	—	$	—	$	—
Long-term debt	Long-term debt	11,106		—		1,184		2,385		7,537		Long-term debt	10,292		—		2,235		1,780		6,277
Interest on long-term debt	Interest on long-term debt	5,498		473		822		688		3,515		Interest on long-term debt	5,026		420		775		612		3,219
Net operating leases	Net operating leases	2,547		405		700		528		914		Net operating leases	2,533		396		660		521		956
Service agreements	Service agreements	212		83		76		53		—		Service agreements	196		98		72		23		3
Other long-term obligations	Other long-term obligations	517		180		309		27		1		Other long-term obligations	574		209		353		10		2

Total	Total	$	21,596	$	2,357	$	3,591	$	3,681	$	11,967	Total	$	19,137	$	1,639	$	4,095	$	2,946	$	10,457

The ~~above~~table does not include unrecognized tax ~~benefit~~sbenefits of ~~$102~~$101 million a~~ccounted for under ASC Topic No. 740,~~ as the Company is unable to reasonably predict the timing of settlement of these liabilities, other than approximately ~~$10~~$22 million that may become payable within one year.

The ~~above does not include~~table also excludes the provisional estimate of remaining transitional tax payments related to the Tax Cuts and Job Act ("the TCJA") of ~~$65~~$66 million.

Management’s Discussion of Critical Accounting Policies

The Company’s discussion of critical accounting policies that place the most significant demands on management’s judgment and requires management to make significant estimates about matters that are inherently uncertain are discussed in the MD&A in the ~~2019~~2020 Form 10-K.

New Accounting Guidance

Note 19 to the consolidated financial statements in this report contains a discussion of recently issued accounting guidance and their impact or potential future impact on the Company’s financial results, if determinable.

~~Reconciliation of Non-GAAP Measures~~

On April 1, 2019, the Company completed its previously announced acquisition of JLT. JLT's results of operations for the three and nine month periods ended September 30, 2020 are included in the Company’s results of operations. JLT's results of operations for the three months ending March 31, 2019 are not included in the Company's results of operations for the nine month period ended September 30, 2019. Prior to being acquired by the Company, JLT operated in three segments, Specialty, Reinsurance and Employee Benefits. As of April 1, 2019, the historical JLT businesses were combined into MMC operations as follows: JLT Specialty is included by geography within Marsh, JLT Reinsurance is included within Guy Carpenter and the majority of the JLT Employee Benefits business is included in Mercer Health and Wealth.

The JLT Transaction had a significant impact on the Company’s results of operations in 2020. The Company believes that in addition to the change in reported GAAP revenue, a comparison of 2020 GAAP reported revenue to the combined 2019 revenue of MMC and JLT, as if the companies were combined on January 1, 2019, provides investors with meaningful information as to the Company’s year-over-year underlying operating results. Investors should not consider the comparison of these non-GAAP measures in isolation from, or as a substitute for, the financial information that the Company reports in accordance with GAAP.

The "2019 Including JLT" revenue information set forth in the table below presents revenue information as if the companies were combined on January 1, 2019 and is not necessarily indicative of what the results would have been had we operated the business since January 1, 2019.

The MMC revenue amounts are as previously reported by the Company in its quarterly filings on Form 10-Q for the applicable periods. JLT 2019 revenue information is derived using the same policies and adjustments as the "JLT Supplemental Information - Revenue Analysis" furnished to the SEC on June 6, 2019 on Form 8-K, which is not incorporated by reference in this Form 10-Q, and includes the revenue from JLT’s aerospace business.

~~(In millions)~~

Nine Months Ended
September 30, 2019

~~MMC As Previously Reported~~

~~Risk & Insurance Services~~

~~Marsh~~

~~5,795~~

~~Guy Carpenter~~

~~1,328~~

~~Subtotal~~

~~7,123~~

~~Fiduciary Interest Income~~

~~Total Risk & Insurance Services~~

~~7,203~~

~~Consulting~~

~~Mercer~~

~~3,695~~

~~Oliver Wyman Group~~

~~1,563~~

~~Total Consulting~~

~~5,258~~

~~Corporate Eliminations~~

~~(73)~~

~~Total Revenue~~

~~12,388~~

~~JLT 2019~~

~~Specialty (Marsh)~~

~~232~~

~~Reinsurance (Guy Carpenter)~~

~~118~~

~~Employee Benefits (Mercer)~~

~~Subtotal~~

~~424~~

~~Fiduciary Interest Income~~

~~Total Revenue~~

~~429~~

~~2019 Including JLT~~

~~Marsh~~

~~6,027~~

~~Guy Carpenter~~

~~1,446~~

~~Subtotal~~

~~7,473~~

~~Fiduciary Interest Income~~

~~Total Risk & Insurance Services~~

~~7,558~~

~~Consulting~~

~~Mercer~~

~~3,769~~

~~Oliver Wyman Group~~

~~1,563~~

~~Total Consulting~~

~~5,332~~

~~Corporate Eliminations~~

~~(73)~~

~~Total Revenue Including JLT~~

~~12,817~~

5548

Item 3.Quantitative and Qualitative Disclosures About Market Risk.

Market Risk and Credit Risk

Certain of the Company’s revenues, expenses, assets and liabilities are exposed to the impact of interest rate changes and fluctuations in foreign currency exchange rates and equity markets.

Interest Rate Risk and Credit Risk

Interest income generated from the Company's cash investments as well as invested fiduciary funds will vary with the general level of interest rates.

The Company had the following investments subject to variable interest rates:


(In ~~millions)~~millions of dollars)	September 30, ~~2020~~2021
Cash and cash equivalents invested in money market funds, certificates of deposit and time deposits	$	~~2,388~~1,398
Fiduciary cash and investments	$	~~8,765~~10,408

Based on ~~the above~~these balances, if short-term interest rates increased or decreased by 10%, or 32 basis points, ~~for~~over the ~~remainder of the~~full year, annual interest income, including interest earned on fiduciary funds, would increase or decrease by approximately $1 million.

Changes in interest rates can also affect the discount rate and assumed rate of return on plan assets, two of the assumptions among several others used to measure net periodic pension expense. The assumptions used to measure plan assets and liabilities are typically assessed at the end of each year, and determine the expense for the subsequent year. Assumptions used to determine net periodic expense for ~~2020~~2021 are discussed in Note 8 to the consolidated financial statements included in our most recently filed Annual Report on Form 10-K. For a discussion on pension expense sensitivity to changes in these rates, see the "Management’s Discussion and Analysis of Financial Condition and Results of Operations-Management’s Discussion of Critical Accounting Policies-Retirement Benefits" section of our most recently filed Annual Report on Form 10-K.

In addition to interest rate risk, our cash investments and fiduciary fund investments are subject to potential loss of value due to counter-party credit risk. To minimize this risk, the Company ~~and its subsidiaries invest~~invests pursuant to a Board approved investment policy. The policy mandates the preservation of principal and liquidity and requires broad diversification with counter-party limits assigned based primarily on credit rating and type of investment. The Company carefully monitors its cash and fiduciary fund investments and will further restrict the portfolio as appropriate to market conditions. The majority of cash and fiduciary fund investments are invested in short-term bank deposits and liquid money market funds.

Foreign Currency Risk

The translated values of revenue and expense from the Company’s international operations are subject to fluctuations due to changes in currency exchange rates. The non-U.S. based revenue that is exposed to foreign exchange fluctuations is ~~approximately 54%~~approximately 53% of total revenue. We periodically use forward contracts and options to limit foreign currency exchange rate exposure on net income and cash flows for specific, clearly defined transactions arising in the ordinary course of business. Although the Company has significant revenue generated in foreign locations which is subject to foreign exchange rate fluctuations, in most cases both the foreign currency revenue and expenses are in the functional currency of the foreign location. As such, under normal circumstances, the U.S. dollar translation of both the revenues and expenses, as well as the potentially offsetting movements of various currencies against the U.S. dollar, generally tends to mitigate the impact on net operating income of foreign currency risk. However, there have been periods where the impact was not mitigated due to external market factors, and external macroeconomic events ~~such as the impact of "Brexit" in the United Kingdom,~~ may result in greater foreign exchange rate fluctuations in the future. If foreign exchange rates of major currencies (Euro, Sterling, Australian dollar and Canadian dollar) moved 10% in the same direction against the U.S. dollar that held constant over the course of the year, the Company estimates that full year net operating income would increase or decrease by ~~approximately $41~~approximately $65 million. The Company has exposure to ~~approximately~~approximately 80 foreign ~~currencies~~currencies overall. If exchange rates at September 30, ~~2020~~2021 hold constant for the rest of ~~2020,~~2021, the Company estimates the year-over-year impact from conversion of foreign currency earnings will ~~decrease~~increase full year net operating income by ~~approximately $7 million.~~approximately $49 million.

In Continental Europe, the largest amount of revenue from renewals for the Risk and Insurance Services segment occurs in the first quarter.

5649

Equity Price Risk

The Company holds investments in both public and private companies as well as private equity funds, including investments of approximately ~~$58~~$74 million that are valued using readily determinable fair values and approximately ~~$43~~$33 million of investments without readily determinable fair values. The Company also has investments of approximately ~~$265~~$328 million that are accounted for using the equity method. The investments are subject to risk of decline in market value, which, if determined to be other than temporary for assets without readily determinable fair values, could result in realized impairment losses. The Company periodically reviews the carrying value of such investments to determine if any valuation adjustments are appropriate under the applicable accounting pronouncements.

At September 30, ~~2020,~~2021, the Company owns approximately ~~201 million shares or approximately 16%~~14% of the common stock of Alexander Forbes ("AF"), a South African company listed on the Johannesburg Stock Exchange, at a closing share price of ~~3.50~~4.15 South African Rand per share. The investment in AF is accounted at fair value, with investment gains and losses recorded as investment income in the consolidated statement of income. The fair value of this investment at September 30, 2021 was approximately $55 million.

Other

A number of lawsuits and regulatory proceedings are pending. See Note 17 ("Claims, Lawsuits and Other Contingencies") to the consolidated financial statements in this report.

Item 4. Controls & Procedures.

a. Evaluation of Disclosure Controls and Procedures

Based on their evaluation, as of the end of the period covered by this report, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934) are effective.

b. Changes in Internal Control

There were no other changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) under the Securities Exchange Act of 1934 that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. ~~The Company will continue monitoring and assessing any impacts from COVID-19 on our internal controls.~~

5750

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

WeThe Company and ~~our~~its subsidiaries are also party to a variety of other legal, administrative, regulatory and government proceedings, claims and inquiries arising in the normal course of business. Additional information regarding certain legal proceedings and related matters as set forth in Note 17 to the consolidated financial statements provided in Part I of this report is incorporated herein by reference.

Item 1A. Risk Factors.

The Company and its subsidiaries face a number of risks and uncertainties. In addition to the other information in this report and our other filings with the SEC, readers should consider carefully the risk factors discussed in "Part I, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, ~~2019 and in "Part II, Item 1A. Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended March 31,~~ 2020.

If any of the risks described in our Annual Report on Form 10-K or such other risks actually occur, our business, results of operations or financial condition could be materially adversely affected.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Repurchases of Equity Securities

~~The Company did not repurchase any shares of its common stock during the third quarter of 2020.~~ In November 2019, the Board of Directors of the Company authorized the Company to repurchase up to $2.5 billion in shares of the Company's common stock, which superseded any prior authorizations. The Company repurchased approximately 1.9 million shares of its common stock for $289 million during the third quarter of 2021. As of September 30, ~~2020,~~2021, the Company remained authorized to repurchase up to approximately ~~$2.4~~$1.7 billion in shares of its common stock. There is no time limit on the authorization.

~~Period~~

(a)
Total
Number of
Shares (or
Units)
Purchased

(b)
Average
Price
Paid per
Share
(or Unit)

(d)
Maximum
Number (or
Approximate
Dollar Value) of
Shares (or
Units) that May
Yet Be
Purchased
Under the Plans
or Programs

~~July 1-31, 2020~~

—

~~2,422,987,756~~

~~August 1-31, 2020~~

—

~~2,422,987,756~~

~~September 1-30, 2020~~

—

~~2,422,987,756~~

~~Total~~

—

~~2,422,987,756~~


Period	(a) Total Number of Shares (or Units) Purchased	(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
July 1-31, 2021	703,299	$	142.8967	703,299	$	1,877,976,872
August 1-31, 2021	643,816	$	153.0324	643,816	$	1,779,452,151
September 1-30, 2021	572,329	$	158.0839	572,329	$	1,688,976,131
Total	1,919,444	$	150.8248	1,919,444	$	1,688,976,131

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosure.

Not Applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

See the Exhibit Index immediately following the signature page of this report, which is incorporated herein by reference.

5951

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date:	October ~~30, 2020~~21, 2021	/s/ Mark C. McGivney
		Mark C. McGivney
		Chief Financial Officer

Date:	October ~~30, 2020~~21, 2021	/s/ Stacy M. Mills
		Stacy M. Mills
		Vice President & Controller
		(Chief Accounting Officer)

6052

EXHIBIT INDEX


Exhibit No.						Exhibit Name

31.1						Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31.2						Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

32.1						Section 1350 Certifications

101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH						XBRL Taxonomy Extension Schema

101.CAL						XBRL Taxonomy Extension Calculation Linkbase

101.DEF						XBRL Taxonomy Extension Definition Linkbase

101.LAB						XBRL Taxonomy Extension Label Linkbase

101.PRE						XBRL Taxonomy Extension Presentation Linkbase

6153


PART I. FINANCIAL INFORMATION		4

ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	4

	CONSOLIDATED STATEMENTS OF INCOME	4

	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	5

	CONSOLIDATED BALANCE SHEETS	6

	CONSOLIDATED STATEMENTS OF CASH FLOWS	8

	CONSOLIDATED STATEMENTS OF EQUITY	9

	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	10

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS	4036
	OF OPERATIONS
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	5649

ITEM 4.	CONTROLS & PROCEDURES	5750

PART II. OTHER INFORMATION		5851

ITEM 1.	LEGAL PROCEEDINGS	5851

ITEM 1A.	RISK FACTORS	5851

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	5951

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	5951

ITEM 4.	MINE SAFETY DISCLOSURE	5951

ITEM 5.	OTHER INFORMATION	5951

ITEM 6.	EXHIBITS	5951